Transforming growth factor-beta (TGF-beta) plays a key role in osteoblast differentiation and bone development and remodeling. Collagenase-3 (matrix metalloproteinase-13) is expressed by osteoblasts and seems to be involved in osteoclastic bone resorption. Here, we show that TGF-beta 1 stimulates collagenase-3 expression in the rat osteoblastic cell line UMR 106-01 and requires de novo protein synthesis. Dominant-negative Smad2/3 constructs indicated that Smad signaling is essential for TGF-beta 1-stimulated collagenase-3 promoter activity. Inhibitors of the ERK1/2 and p38 MAPK pathways, but not the JNK pathway, reduced TGF-beta 1-stimulated collagenase-3 expression, indicating that the p38 MAPK and ERK1/2 pathways are also required for TGF-beta 1-stimulated collagenase-3 expression in UMR 106-01 cells. These inhibitors did not prevent nuclear localization of Smad proteins, but they inhibited Smad-mediated transcriptional activation. We have shown for the first time that Runx2 (a bone transcription factor and a potential substrate for the MAPK pathway) is phosphorylated in response to TGF-beta 1 treatment in osteoblastic cells. Cotransfection of Smad2 and Runx2 constructs had a cooperative effect on TGF-beta 1-stimulated collagenase-3 promoter activity in these cells. We further identified ligand-independent physical interaction between Smad2 and Runx2. Taken together, our results provide an important role for cross-talk between the Smad and MAPK pathways and their components in expression of collagenase-3 following TGF-beta 1 treatment in UMR 106-01 cells.