Members of the transforming growth factor-beta superfamily play essential roles in both the pluripotency and differentiation of embryonic stem (ES) cells. Although bone morphogenic proteins (BMPs) maintain pluripotency of undifferentiated mouse ES cells, the role of autocrine Nodal signaling is less clear. Pharmacological, molecular, and genetic methods were used to further understand the roles and potential interactions of these pathways. Treatment of undifferentiated ES cells with SB431542, a pharmacological inhibitor of Smad2 signaling, resulted in a rapid reduction of phosphorylated Smad2 and altered the expression of several putative downstream targets. Unexpectedly, inhibition of the Nodal signaling pathway resulted in enhanced BMP signaling, as assessed by Smad1/5 phosphorylation. SB431542-treated cells also demonstrated significant induction of the Id genes, which are known direct targets of BMP signaling and important factors in ES cell pluripotency. Inhibition of BMP signaling decreased the SB431542-mediated phosphorylation of Smad1/5 and induction of Id genes, suggesting that BMP signaling is necessary for some Smad2-mediated activity. Because Smad7, a known inhibitory factor to both Nodal and BMP signaling, was down-regulated following inhibition of Nodal-Smad2 signaling, the contribution of Smad7 to the cross-talk between the transforming growth factor-beta pathways in ES cells was examined. Biochemical manipulation of Smad7 expression, through shRNA knockdown or inducible gene expression, significantly reduced the SB431542-mediated phosphorylation of Smad1/5 and induction of the Id genes. We conclude that autocrine Nodal signaling in undifferentiated mouse ES cells modulates the vital pluripotency pathway of BMP signaling.