Transforming growth factor-beta (TGF-beta) in renal fibrosis has been well studied, but little attention has been paid to the potential role of TGF-beta in the resolution of renal inflammation. We hypothesize that TGF-beta exerts its anti-inflammation properties by stimulating its negative signaling pathway involving Smad7. A rat remnant kidney model was treated with a doxycycline-regulated Smad7 gene or control empty vector using an ultrasound-microbubble (Optison)-mediated system. Smad7 transgene expression within the kidney was tightly controlled by the addition of doxycycline in the daily drinking water. All animals were euthanized at week 4 for examination of inflammatory responses. Real-time polymerase chain reaction (PCR) and immunohistochemistry revealed that gene transfer of Smad7 resulted in a substantial inhibition of interleukin-1beta (IL-1beta) and tumor necrosis factor alpha (TNFalpha) expression (all P < 0.01 vs. control). This was associated with the attenuation of histology damage, proteinuria, serum creatinine, and an increase in creatinine clearance (all P < 0.05). In addition, overexpression of Smad7 significantly inhibited renal inflammation, including ICAM-1, iNOS, and accumulation of macrophages and T cells in both glomeruli and tubulointerstitium. Furthermore, gene transfer of Smad7 also substantially blocked nuclear factor kappa B (NFkappaB) activation in the rat remnant kidney (P < 0.01). TGF-beta/Smad7 signaling plays a critical role in the resolution of renal inflammation in rat remnant kidney model. Inhibition of NFkappaB activation is a key mechanism by which Smad7 suppresses renal inflammation, which suggests a crosstalk pathway between NFkappaB and Smad7. The ability of Smad7 to inhibit renal inflammation indicates that ultrasound-microbubble-mediated Smad7 gene therapy may represents a new therapeutic strategy for glomerulonephritis.