The endothelial transcription factor ETS (Erythroblast‐transformation specific)‐related gene (ERG) regulates canonical TGFβ‐SMAD signaling, by repressing SMAD3 activity. SMAD proteins function as important mediators of intracellular signal transduction of TGF‐β. Following their phosphorylation by TGF‐β receptor‐I, Receptor‐regulated SMADs (including SMAD2 and SMAD3 proteins) form a heteromeric complex with co‐SMAD and then translocate into the nucleus where they bind and regulate the expression of multiple target genes. Recent studies from our lab have demonstrated that ERG is a critical regulator of permeability in human lung microvascular endothelial cells (HLMECs) where ERG gene activation provided protection to the barrier. We have hypothesized that the protective effects of ERG on barrier integrity may be mediated via inhibiting TGF‐β/SMAD3 signaling pathway. To study the role of SMAD3 in microvascular endothelial barrier functions and permeability, HLMECs were grown on Transwell inserts and other cell culture platforms. Monolayer permeability was evaluated based on FITC‐albumin extravasation and measurement of its fluorescence intensity. TGF‐β (1‐50 ng/ml) induced a dose‐dependent increase in monolayer hyperpermeability. TGF‐β‐induced hyperpermeability was attenuated by a SMAD3 pharmacological inhibitor (SIS3) or CRISPR/cas9‐mediated knockdown of SMAD3. Immunoblot analysis demonstrated highly efficient SMAD3 knockdown by SMAD3 CRISPR/Cas9. TGF‐β treatment resulted in significant increase in matrixmetalloproteinase‐9 (MMP‐9) activity and the effect was decreased by SMAD3 inhibition. MMP‐9 is known to proteolytically breakdown the adherens junction proteins in microvascular endothelial cells, resulting in hyperpermeability. These results demonstrate that SMAD3 is a mediator of TGF‐β signaling‐induced loss of endothelial barrier integrity and permeability in microvascular endothelial cells. It also suggests that one of the downstream effects of TGFβ‐SMAD signaling is the activation of MMP‐9 which mediates loss of adherens junctional integrity.