Members of the transforming growth factor-beta (TGF-beta) family have been shown to play an important role in the regulation of gut epithelial gene expression. We have used the intestinal alkaline phosphatase (IAP) and intestinal fatty acid binding protein (IFABP) promoters to dissect the mechanisms by which TGF-beta1 signaling regulates gut epithelial gene expression. TGF-beta signaling alone was not sufficient for activation of IAP and IFABP promoters. However, TGF-beta signaling cooperated with the gut epithelial transcription factor GATA4 to synergistically activate IAP and IFABP promoters. Coexpression of GATA4 along with the TGF-beta1 signal transducing downstream effectors such as Smad2, 3, and 4 resulted in synergistic activation of both IAP and IFABP promoters. This synergistic activation was reduced by simultaneous expression of dominant-negative Smad4. -40 and -89 GATA binding sites in the IFABP promoter were required for the synergistic activation by Smad2, 3, and 4 and GATA4. GATA4 and Smad2, 3, and 4 physically associated with each other and this interaction was mediated through the MH2 domain of Smad2, 3, and 4 and the second zinc finger and the COOH-terminal basic domain of GATA4. The COOH-terminal activation domain and the Smad-interacting second zinc finger domain of GATA4 were required for the synergistic activation of the IFABP promoter. Naturally occurring oncogenic mutations within the GATA4-interacting MH2 domain of Smad2 reduced the coactivation of IFABP promoter by Smad2 and GATA4. Our results suggest that the TGF-beta signaling regulates gut epithelial gene expression by targeting GATA4.