Transforming growth factor β (TGFβ) has participated in a variety of cellular biological processes. Smad2 and Smad3 are equally important TGFβ downstream effectors in mediating TGFβ signals. However, genes involved in controlling the balance between these two signaling pathways are unknown. In this study, we showed that although Smad2 and Smad3 are structurally similar, with 89% amino acid sequence similarity in bovine, Smad3 significantly decreased Smad2 mRNA and protein expression during bovine myoblast differentiation, but not by binding on its promoter. Luciferase assays and electrophoretic mobility shift assays (EMSA) demonstrated that the transcription factors C/EBPα and C/EBPβ activate Smad2 promoter activity and expression under high serum medium (GM), whereas the opposite was observed under low serum medium (DM). Moreover, over-expression and interference assays revealed that Smad3 has a different effect on C/EBPα and C/EBPβ expression under GM versus DM conditions. After mutation of the C/EBPα and C/EBPβ binding sites, Smad3 had a reduced effect on Smad2 promoter activity. Therefore, these results demonstrated that Smad3 inhibits Smad2 expression via its transcription factors C/EBPα and C/EBPβ during bovine myoblast differentiation. This novel mechanism of the Smad2/3 genes may offer clues for further investigation of TGFβ signal function.