TGF-beta (transforming growth factor-beta) induces a cytostatic response in most normal cell types. In cancer cells, however, it often promotes metastasis, and its high expression is correlated with poor prognosis. In the present study, we show that S100A4, a metastasis-associated protein, also called metastatin-1, can physically and functionally interact with Smad3, an important mediator of TGF-beta signalling. In agreement with its known property, S100A4 binds to Smad3 in a Ca2+-dependent manner. The S100A4-binding site is located in the N-terminal region of Smad3. S100A4 can potentiate transcriptional activity of Smad3 and the related Smad2. When exogenously expressed in MCF10CA1a.cl1, an MCF10-derived breast cancer cell line, S100A4 increases TGF-beta-induced MMP-9 (matrix metalloproteinase-9) expression. On the other hand, depletion of S100A4 by siRNA (small interfering RNA) from the MDA-MB231 cell line results in attenuation of MMP-9 induction by TGF-beta. Consistent with these observations, S100A4 increases cell invasion ability induced by TGF-beta in MCF10CA1a.cl1 cells, and depletion of the protein in MDA-MB-231 cells inhibits it. Because expression of both S100A4 and TGF-beta is highly elevated in many types of malignant tumours, S100A4 and Smad3 may co-operatively increase metastatic activity of some types of cancer cells.