Transforming growth factor‐β (TGF‐β) signaling is known to depend on the formation of Smad2/3‐Smad4 transcription regulatory complexes. However, the signaling functions of Smad2/3‐Smad4 during TGF‐β‐induced responses are obscure as TGF‐β also initiates a number of other signaling pathways. In this study, we systematically assessed the contribution of TGF‐β‐Smad2/3‐Smad4 signaling to both target gene transcription and apoptosis. Individual Smads were selectively knocked down in Hep3B cells by stable RNA interference (RNAi). We identified TGF‐β‐responsive genes using genome‐wide oligonucleotide microarrays and confirmed their dependency on Smad2, Smad3, or Smad4 by the combination of RNAi and microarray assay. The major finding from our microarray analysis was that of the 2,039 target genes seen to be regulated via TGF‐β induction, 190 were differentially transcriptionally controlled by Smad2‐Smad4 and Smad3‐Smad4 signaling and the latter control mechanism appeared to be functionally more important. We also found indirect evidence of competition between Smad2 and Smad3 for their activation when controlling the transcription of target genes. Functional analysis revealed that Smad3 and Smad4 were the predominant mediators of TGF‐β‐induced apoptosis in Hep3B cells. We provide evidence that up‐regulation of Bcl‐2‐interacting mediator of cell death (Bim), under the transcriptional control of Smad3‐Smad4 signaling, is crucial to TGF‐β‐induced apoptosis in Hep3B cells. J. Cell. Physiol. 215: 422–433, 2008. © 2007 Wiley‐Liss, Inc.