Runx factors control lineage commitment and are transcriptional effectors of Smad signaling. Genetic defects in these pathways interfere with normal development. The in situ localization of Runx and Smad proteins must impact the mechanisms by which these proteins function together in gene regulation. We show that the integration of Runx and Smad signals is mediated by in situ interactions at specific foci within the nucleus. Activated Smads are directed to these subnuclear foci only in the presence of Runx proteins. Smad-Runx complexes are associated in situ with the nuclear matrix, and this association requires the intranuclear targeting signal of Runx factors. The convergence of Smad and Runx proteins at these sites supports transcription as reflected by BrUTP labeling and functional cooperativity between the proteins. Thus, Runx-mediated intranuclear targeting of Smads is critical for the integration of two distinct pathways essential for fetal development.M ammalian cells respond to a vast array of extracellular signals that play a critical role in determining cell fate. These regulatory signals are often transmitted to the nucleus by proteins capable of nucleocytoplasmic shuttling. After signalinduced activation, these proteins interact with transcription factors and act on target genes (1-4). A broad range of nuclear proteins including tissue-restricted transcription factors (e.g., Runx proteins), chromatin-remodeling complexes (e.g., SWI͞ SNF), components of basal transcription machinery (e.g., active form of RNA Pol II), and proteins involved in RNA processing (e.g., SC35) exhibit distinct subnuclear distributions (5-8). The subnuclear organization of these regulatory complexes may determine their optimal functions. Mechanisms underlying the activation of signaling proteins and their nuclear translocation have been extensively studied (1-4). It remains elusive whether the biological activities of these proteins require assembly of regulatory complexes within distinct subnuclear domains.Runx factors exhibit a tissue-restricted pattern of expression and are required for definitive hematopoiesis and osteoblast maturation (9-12). Runx proteins have recently been shown to interact through their C-terminal segment with Smads, a family of signaling proteins that regulate a diverse array of developmental and biological processes in response to transforming growth factor (TGF)-͞bone morphogenetic protein (BMP) family of growth factors (1, 13-16). The C terminus of Runx proteins also mediates interactions with coregulators like Yesassociated protein (17) and groucho͞TLE proteins (18). Moreover, subnuclear distribution of Runx proteins is mediated by the nuclear matrix-targeting signal, a protein motif present in the C terminus of Runx factors (19)(20)(21)(22). Importantly, in vivo osteogenesis requires the C terminus of Runx2 containing the overlapping subnuclear targeting signal and the Smad interacting domain (23). The Runx and Smad proteins are jointly involved in the regulation of phenotypic gene expression a...