Transforming growth factor β (TGFβ) has an important role as a negative regulator of cellular proliferation. The type III transforming growth factor β receptor (TβRIII) has an emerging role as both a TGFβ superfamily co-receptor and in mediating signaling through its cytoplasmic domain. In L6 myoblasts, TβRIII expression enhanced TGFβ1-mediated growth inhibition, with this effect mediated, in part, by the TβRIII cytoplasmic domain. The effects of TβRIII were not due to altered ligand presentation or to differences in Smad2 phosphorylation. Instead, TβRIII specifically increased Smad3 phosphorylation, both basal and TGFβ-stimulated Smad3 nuclear localization and Smad3-dependent activation of reporter genes independent of its cytoplasmic domain. Conversely, SB431542, a type I transforming growth factor β receptor (TβRI) inhibitor, as well as dominant-negative Smad3 specifically and significantly abrogated the effects of TβRIII on TGFβ1-mediated inhibition of proliferation. TβRIII also specifically increased p38 phosphorylation, and SB203580, a p38 kinase inhibitor, specifically and significantly abrogated the effects of TβRIII/TGFβ1-mediated inhibition of proliferation in L6 myoblasts and in primary human epithelial cells. Importantly, treatment with the TβRI and p38 inhibitors together had additive effects on abrogating TβRIII/ TGFβ1-mediated inhibition of proliferation. In a reciprocal manner, short hairpin RNA-mediated knockdown of endogenous TβRIII in various human epithelial cells attenuated TGFβ1-mediated inhibition of proliferation. Taken together, these data demonstrate that TβRIII contributes to and enhances TGFβ-mediated growth inhibition through both TβRI/Smad3-dependent and p38 mitogen-activated protein kinase pathways.