Intracellular signaling by the pleiotropic cytokine transforming growth factor- (3 (TGF-(3) is inhibited by Smad7 in a feedback control mechanism. The activity of Smad7 is tightly regulated by multiple post-translational modifications. Using resin-assisted capture and metabolic labeling methods, we show here that Smad7 is S-palmitoylated in mammary epithelial cell models that are widely studied because of their strong responses to TGF-(3 and their biological relevance to mammary development and tumor progression. S-palmitoylation of Smad7 is mediated by zDHHC17, a member of a family of 23 S-acyltransferase enzymes. Moreover, we identified four cysteine residues (Cys202, Cys225, Cys415, and Cys417) in Smad7 as palmitoylation acceptor sites. S-palmitoylation of Smad7 on Cys415 and Cys417 promoted the translocation of Smad7 from the nucleus to the cytoplasm, enhanced the stability of the Smad7 protein, and enforced its inhibitory effect on TGF-(3-induced Smad transcriptional response. Thus, our fi ndings reveal a new post-translational modification of Smad7, and highlight an important role of S-palmitoylation to enhance inhibition of TGF-(3/Smad signaling by Smad7.