We have shown that human intestinal smooth muscle cells produce insulin-like growth factor-I (IGF-I) and IGF binding protein-3 (IGFBP-3). Endogenous IGF-I acts in autocrine fashion to stimulate growth of these cells. IGFBP-3 inhibits the binding of IGF-I to its receptor and thereby inhibits IGF-I stimulated growth. In several carcinoma cell lines and some normal cells, IGFBP-3 regulates growth independently of IGF-I. Two mechanisms for this effect have been identified: IGFBP-3 can directly activate TGF- receptors or it can undergo direct nuclear translocation. The aim of the present study was to determine whether IGFBP-3 acts independently of IGF-I and to characterize the mechanisms mediating this effect in human intestinal smooth muscle cells. The direct effects of IGFBP-3 were determined in the presence of an IGF-I receptor antagonist to eliminate its IGF-I-dependent effects. Affinity labeling of TGF- receptors with [¹²⁵I]TGF-1 showed that IGFBP-3 displaced binding to Types II and V TGF- receptors (TGF-RII and TGF-RV) in a concentration-dependent fashion. IGFBP-3 stimulated TGF-RII-dependent serine phosphorylation (activation) of both TGF-RI and of its primary substrate, Smad2(Ser465/467). IGFBP-3 also caused IGF-I-independent inhibition of basal [³H]thymidine incorporation. The effects of IGFBP-3 on Smad2 phosphorylation and on smooth muscle cell proliferation were independent of TGF-1. Immunoneutralization of IGFBP-3 increased basal [³H]thymidine incorporation implying endogenous IGFBP-3 inhibits proliferation. We conclude that endogenous IGFBP-3 directly inhibits proliferation of human intestinal smooth muscle cells by activation of TGF-RI and Smad2, an effect which is independent of its effect on IGF-I stimulated growth.