A balanced immune response requires combating infectious assaults while striving 
to maintain quiescence towards the self. One of the central players in this 
process is the pleiotropic cytokine transforming growth factor-β (TGF-β), whose 
deficiency results in spontaneous systemic autoimmunity in mice. The dominant 
function of TGF-β is to regulate the peripheral immune homeostasis, particularly 
in the microbe-rich and antigen-rich environment of the gut. To maintain 
intestinal integrity, the epithelial cells, myeloid cells and lymphocytes that 
inhabit the gut secrete TGF-β, which acts in both paracrine and autocrine 
fashions to activate its signal transducers, the SMAD transcription factors. The 
SMAD pathway regulates the production of IgA by B cells, maintains the 
protective mucosal barrier and promotes the balanced differentiation of CD4(+) T 
cells into inflammatory T helper type 17 cells and suppressive FOXP3(+) T 
regulatory cells. While encounters with pathogenic microbes activate SMAD 
proteins to evoke a protective inflammatory immune response, SMAD activation and 
synergism with immunoregulatory factors such as the vitamin A metabolite 
retinoic acid enforce immunosuppression toward commensal microbes and innocuous 
food antigens. Such complementary context-dependent functions of TGF-β are 
achieved by the co-operation of SMAD proteins with distinct dominant 
transcription activators and accessory chromatin modifiers. This review 
highlights recent advances in unravelling the molecular basis for the 
multi-faceted functions of TGF-β in the gut that are dictacted by fluid 
orchestrations of SMADs and their myriad partners.