In this study, we have characterized the negative regulation of the IL-12 p40 expression by TGF-beta in macrophages. Although murine IL-12 p40 promoter contains a putative TGF-beta inhibitory element (TIE), neither mutation nor deletion of the TIE had any effect on the inhibitory activity of TGF-beta. The NF-kappaB p65 and interferon regulatory factor (IRF)-1 induced promoter activity was suppressed by the expression of a constitutively active TGF-beta type I receptor in the presence of Smad3 and Smad4, which was abrogated by expression of an inhibitory Smad, Smad7. Transcription of a reporter gene containing three copies of both NF-kappaB and IRF-1 elements from the IL-12 p40 promoter was significantly repressed by activation of Smad-dependent TGF-beta pathway. In contrast, reporter containing three copies of either the NF-kappaB or IRF-1 sites was not affected by TGF-beta-Smad pathway. These findings indicated that both the NF-kappaB and IRF-1 sites are required for the repression of promoter activity of IL-12 p40 by TGF-beta.