Secreted protein acidic and rich in cysteine (SPARC), a member of the family of matricellular proteins, regulates the interaction of cells with pleiotropic factors and proteins of the extracellular matrix (ECM). Although it has been appreciated that transforming growth factor beta 1 (TGF-β1) induces SPARC and collagen type I, we have recently shown that SPARC regulates the expression of TGF-β1 and collagen type I in renal mesangial cells via a TGF-β1-dependent pathway, and have proposed a reciprocal, autocrine regulatory feedback loop between SPARC and TGF-β1. Herein, we sought to determine how SPARC regulates TGF-β1-dependent signal transduction. Our data indicate that SPARC modulates the TGF-β1-dependent phosphorylation of Smad-2 in primary mesangial cells derived from wild-type and SPARC-null mice. We also show that SPARC regulates the levels and activation of the stress-activated c-jun-N-terminal kinase (JNK) in mesangial cells by augmentation of the stimulatory effects of TGF-β1. Furthermore, we found that SPARC increases the levels and the activity of the transcription factor c-jun. These effects of SPARC on the TGF-β1 signaling pathway appear to be mediated through an interaction with the TGF-β1-receptor complex, but only in the presence of TGF-β1 bound to its cognate type II receptor. That SPARC is directly involved in the regulation of the TGF-β1 signaling cascade is consistent with the paradigm that matricellular proteins modulate interactions among cells, growth factors, and their respective receptors. © 2004 Wiley-Liss, Inc.