Few cell signals match the impact of the transforming growth factor-β (TGFβ) family in metazoan biology. TGFβ cytokines regulate cell fate decisions during development, tissue homeostasis and regeneration, and are major players in tumorigenesis, fibrotic disorders, immune malfunctions and various congenital diseases. The effects of the TGFβ family are mediated by a combinatorial set of ligands and receptors and by a common set of receptor-activated mothers against decapentaplegic homologue (SMAD) transcription factors, yet the effects can differ dramatically depending on the cell type and the conditions. Recent progress has illuminated a model of TGFβ action in which SMADs bind genome-wide in partnership with lineage-determining transcription factors and additionally integrate inputs from other pathways and the chromatin to trigger specific cellular responses. These new insights clarify the operating logic of the TGFβ pathway in physiology and disease.