The calcineurin inhibitor (CNI)-induced renal fibrosis is attributed to an exaggerated deposition of extracellular matrix, which is mainly due to an increased expression of TGFβ. Herein we demonstrate that the CNI cyclosporin A and tacrolimus (FK506), independent of TGFβ synthesis, rapidly activate TGFβ/Smad signaling in cultured mesangial cells and in whole kidney samples from CNI-treated rats. By EMSA, we demonstrate increased DNA binding of Smad-2, -3, and -4 to a cognate Smad-binding promoter element (SBE) accompanied by CNI-triggered activation of Smad-dependent expression of tissue inhibitor of metalloprotease-1 (TIMP-1) and connective tissue growth factor. Using an activin receptor-like kinase-5 (ALK-5) inhibitor and by small interfering RNA we depict a critical involvement of both types of TGFβ receptors in CNI-triggered Smad signaling and fibrogenic gene expression, respectively. Mechanistically, CNI cause a rapid activation of latent TGFβ, which is prevented in the presence of the antioxidant N-acetyl cysteine. A convergent activation of p38 MAPK is indicated by the partial blockade of CNI-induced Smad-2 activation by SB203580; conversely, both TGFβ-RII and TGFβ are critically involved in p38 MAPK activation by CNI. Activation of both signaling pathways is similarly triggered by reactive oxygen species. Finally, we show that neutralization of TGFβ markedly reduced the CNI-dependent Smad activation in vitro and in vivo. Collectively, this study demonstrates that CNI via reactive oxygen species generation activate latent TGFβ and thereby initiate the canonical Smad pathway by simultaneously activating p38 MAPK, which both synergistically induce Smad-driven gene expression.