The TGF-β pathway plays an essential role in regulating cell proliferation and differentiation. GWASs and candidate approaches have identified a battery of genetic variants in the TGF-β pathway contributing to colorectal cancer (CRC). However, most of the significant variants are common variants and their functions remain ambiguous. To identify causal variants with low-frequency in the TGF-β pathway contributing to CRC susceptibility in Chinese population, we performed targeted sequencing of 12 key genes in TGF-β signaling in CRC patients followed by a two-stage case-control study with a total of 5109 cases and 5169 controls. Bioinformatic annotations and biochemical experiments were applied to reveal the potential functions of significant variants. Seven low-frequency genetic variants were captured through targeted sequencing. The two stage association studies showed that missense variant rs3764482 (c. 83C>T; p. S28F) in the gene SMAD7 was consistently and significantly associated with CRC risk. Compared with the wild type, the ORs for variant allele were 1.37 (95%CI: 1.10-1.70, P = 0.005), 1.55 (95%CI: 1.30-1.86, P = 1.15 × 10 ), and 1.48 (1.29-1.70, P = 2.44 × 10 ) in stage 1, stage 2, and the combined analyses, respectively. Functional annotations revealed that the minor allele T of rs3764482 was more effective than the major allele C in blocking the TGF-β signaling and inhibiting the phosphorylation of receptor-regulated SMADs (R-SMADs). In conclusion, low-frequency coding variant rs3764482 in SMAD7 is associated with CRC risk in Chinese population. The rs3764482 variant may block the TGF-β signaling via impeding the activation of downstream genes, leading to cancer cell proliferation, thus contributing to CRC pathogenesis.