Chronic kidney disease (CKD) is known to be the hallmark with fibrosis and inflammation that leads to end stage renal disease. Since the discovery over 2 decades ago of transforming growth factor (TGF)-β as a key mediator in CKD, studies of TGF-β signaling in the kidney have focused on fibrosis and inflammation. TGF-β exerts its cellular effect via Smad2 and Smad3 after binding to its receptors. Smad7, as an inhibitory Smad, provides a negative feedback loop to limit TGF-β action for maintaining homeostasis. Recently, the precise roles of individual Smads and receptors have been further characterized and the results reveal the complexity of TGF-β signaling during CKD. Although Smad3 plays a pathogenic role in CKD, Smad2 and Smad7 are protective. Furthermore, Smad4 enhances Smad3-mediated renal fibrosis as well as suppresses nuclear factor-κB-driven renal inflammation in a Smad7-dependent manner. Emerging evidence demonstrates the ability of TGF-β/Smad3 signaling to regulate specific microRNAs, revealing that microRNAs are critical downstream effectors of TGF-β/Smad3 signaling in renal fibrosis and inflammation. Recent studies in animal models of kidney disease demonstrate the therapeutic potential of microRNA therapy, Smad3 inhibitor, and Smad7 agonist in CKD. Because the accumulation of extracellular matrix and infiltration of inflammatory cells, which are the major pathological consequences of CKD, are due to activation of TGF-β/Smad3 signaling pathways, targeting the downstream TGF-β/Smad3 signaling pathway by gene transfer of either Smad7 or Smad3-dependent microRNAs, and by applying Smad3 inhibitor and Smad7 agonist may offer a specific and effective therapeutic strategy for kidney disease.