TGF-β1 functions as a negative regulator of T cell immune responses, signaling to target cells using the Smad family of proteins. We show here that Smad7, an inhibitor of TGF-β1 signaling, is overexpressed in inflammatory bowel disease (IBD) mucosa and purified mucosal T cells. Both whole tissue and isolated cells exhibit defective signaling through this pathway, as measured by phospho-Smad3 immunoreactivity. Specific antisense oligonucleotides for Smad7 reduce Smad7 protein expression in cells isolated from patients with IBD, permitting the cells to respond to exogenous TGF-β1. TGF-β1 cannot inhibit proinflammatory cytokine production in isolated lamina propria mononuclear cells from patients with Crohn disease (CD), but inhibition of Smad7 restores TGF-β1 signaling and enables TGF-β1 to inhibit cytokine production. In inflamed mucosal tissue explants from patients with CD, inhibition of Smad7 also restores p-Smad3 and decreases proinflammatory cytokine production, an effect that is partially blocked by anti–TGF-β1. These results show that Smad7 blockade of TGF-β1 signaling helps maintain the chronic production of proinflammatory cytokines that drives the inflammatory process in IBD and that inhibition of Smad7 enables endogenous TGF-β to downregulate this response.