Activation of hepatic stellate cells (HSC), the major effectors of hepatic fibrogenesis, is coupled with sequential alterations in gene expression, including an increase in receptors for transforming growth factor-β (TGF-β) and a dramatic reduction in the peroxisome proliferator-activated receptor-γ (PPAR-γ). The relationship between them remains obscure. We previously demonstrated that curcumin induced gene expression of PPAR-γ in activated HSC, leading to reducing cell proliferation, inducing apoptosis and suppressing expression of extracellular matrix genes. The underlying molecular mechanisms are largely unknown. We recently observed that stimulation of PPAR-γ activation suppressed gene expression of TGF-β receptors in activated HSC, leading to the interruption of TGF-β signaling. This observation supported our assumption of an antagonistic relationship between PPAR-γ activation and TGF-β signaling in HSC. In this study, we further hypothesize that TGF-β signaling might negatively regulate gene expression of PPAR-γ in activated HSC. The present report demonstrates that exogenous TGF-β1 inhibits gene expression of PPAR-γ in activated HSC, which is eliminated by the pretreatment with curcumin likely by interrupting TGF-β signaling. Transfection assays further indicate that blocking TGF-β signaling by dominant negative type II TGF-β receptor increases the promoter activity of PPAR-γ gene. Promoter deletion assays, site-directed mutageneses, and gel shift assays localize two Smad binding elements (SBEs) in the PPAR-γ gene promoter, acting as curcumin response elements and negatively regulating the promoter activity in passaged HSC. The Smad3/4 protein complex specifically binds to the SBEs. Overexpression of Smad4 dose dependently eliminates the inhibitory effects of curcumin on the PPAR-γ gene promoter and TGF-β signaling. Taken together, these results demonstrate that the interruption of TGF-β signaling by curcumin induces gene expression of PPAR-γ in activated HSC in vitro. Our studies provide novel insights into the molecular mechanisms of curcumin in the induction of PPAR-γ gene expression and in the inhibition of HSC activation.