Transforming growth factor b (TGFb) superfamily signaling is essential for female reproduction. Dysregulation of the TGFb signaling pathway can cause reproductive diseases. SMA and MAD (mothers against decapentaplegic) (SMAD) proteins are downstream signaling transducers of the TGFb superfamily. SMAD7 is an inhibitory SMAD that regulates TGFb signaling in vitro. However, the function of SMAD7 in the ovary remains poorly defined. To determine the signaling preference and potential role of SMAD7 in the ovary, we herein examined the expression, regulation, and function of SMAD7 in mouse granulosa cells. We showed that SMAD7 was expressed in granulosa cells and subject to regulation by intraovarian growth factors from the TGFb superfamily. TGFB1 (TGFb1), bone morphogenetic protein 4, and oocyte-derived growth differentiation factor 9 (GDF9) were capable of inducing Smad7 expression, suggesting a modulatory role of SMAD7 in a negative feedback loop. Using a small interfering RNA approach, we further demonstrated that SMAD7 was a negative regulator of TGFB1. Moreover, we revealed a link between SMAD7 and GDF9-mediated oocyte paracrine signaling, an essential component of oocyte-granulosa cell communication and folliculogenesis. Collectively, our results suggest that SMAD7 may function during follicular development via preferentially antagonizing and/or fine-tuning essential TGFb superfamily signaling, which is involved in the regulation of oocyte-somatic cell interaction and granulosa cell function.