Transforming growth factors beta (TGFbeta) and cyclic AMP (cAMP) both participate in growth and differentiation of the developing mammalian secondary palate and elicit similar biological responses. Cross-talk between these two signal transduction pathways in cells derived from the embryonic palate has been demonstrated previously. In the present study, we have examined nuclear convergence of these signalling pathways at the level of transcriptional complex formation. Biotinylated oligonucleotides encoding a consensus Smad binding element (SBE), or a cyclic AMP response element (CRE), were mixed with cell extracts from murine embryonic palate mesenchymal (MEPM) cells that were treated with either TGFbeta or forskolin. Protein-oligonucleotide complexes were precipitated with streptavidin-agarose, and analysed by Western blotting to identify proteins in the complex bound to each consensus oligonucleotide. TGFbeta treatment of MEPM cells increased the levels of phosphorylated Smad2, phosphorylated cAMP response element binding protein (CREB), and the coactivator, CREB binding protein (CBP), that were part of a complex bound to the SBE. Treatment of cells with forskolin, a stimulator of adenylate cyclase, increased the amount of phosphorylated CREB and CBP, but not the amount of phosphorylated Smad2 bound in a complex to the SBE. Additionally, the presence of the co-repressors, c-Ski and SnoN, was demonstrated as part of a complex bound to the SBE (but not the CRE). Amounts of c-Ski and SnoN found in the SBE-containing complex increased in response to either TGFbeta or forskolin. These results demonstrate that phosphorylated CREB forms a complex with the co-activator CBP, phosphorylated Smad2 and the co-repressors c-Ski and SnoN on a consensus SBE. This suggests cooperative regulation of genes with SBE-containing promoters by the cAMP and TGFbeta signalling pathways in the developing palate.