Transient adenovirus-mediated gene transfer of IL-1beta (AdIL-1beta), a proinflammatory cytokine, induces marked inflammation and severe and progressive fibrosis in rat lungs. This is associated with an increase in TGF-beta1 concentration in bronchoalveolar lavage (BAL) fluid. TGF-beta1 is a key cytokine in the process of fibrogenesis, using intracellular signaling pathways involving Smad2 and Smad3. In this study we investigate whether inflammation induced by IL-1beta is able to independently induce lung fibrosis in mice deficient in the Smad3 gene. Seven days after AdIL-1beta administration, similar levels of IL-1beta transgene are seen in BAL in both wild-type (WT) and knockout (KO) mice, and BAL cell profiles demonstrated a similar marked neutrophilic inflammation. Phospho-Smad2 staining was positive in areas of inflammation in both WT and KO mice at day 7. By day 35 after transient IL-1beta expression, WT mice showed marked fibrosis in peribronchial areas, quantified by picrosirius red staining and morphometry. However, there was no evidence of fibrosis or collagen accumulation in IL-1beta-treated KO mice, and peribronchial areas were not different from KO mice treated with the control adenovector. TGF-beta1 and phospho-Smad2 were strongly positive at day 35 in fibrotic areas observed in WT mice, but no such staining was detectable in KO mice. The IL-1beta-induced chronic fibrotic response in mouse lungs is dependent on Smad3. KO and WT animals demonstrated a similar inflammatory response to overexpression of IL-1beta indicating that inflammation must link to the Smad3 pathway, likely through TGF-beta, to induce progressive fibrosis.