BACKGROUND: Transforming growth factor beta 1 (TGFβ1) plays a major role in many lung diseases including lung cancer, pulmonary hypertension, and pulmonary fibrosis. TGFβ1 activates a signal transduction cascade that results in the transcriptional regulation of genes in the nucleus, primarily through the DNA-binding transcription factor SMAD3. The objective of this study is to identify genome-wide scale map of SMAD3 binding targets and the molecular pathways and networks affected by the TGFβ1/SMAD3 signaling in lung epithelial cells. METHODOLOGY: We combined chromatin immunoprecipitation with human promoter region microarrays (ChIP-on-chip) along with gene expression microarrays to study global transcriptional regulation of the TGFβ1/SMAD3 pathway in human A549 alveolar epithelial cells. The molecular pathways and networks associated with TGFβ1/SMAD3 signaling were identified using computational approaches. Validation of selected target gene expression and direct binding of SMAD3 to promoters were performed by quantitative real time RT-PCR and electrophoretic mobility shift assay on A549 and human primary lung epithelial cells. RESULTS AND CONCLUSIONS: Known TGFβ1 target genes such as SERPINE1, SMAD6, SMAD7, TGFB1 and LTBP3, were found in both ChIP-on-chip and gene expression analyses as well as some previously unrecognized targets such as FOXA2. SMAD3 binding of FOXA2 promoter and changed expression were confirmed. Computational approaches combining ChIP-on-chip and gene expression microarray revealed multiple target molecular pathways affected by the TGFβ1/SMAD3 signaling. Identification of global targets and molecular pathways and networks associated with TGFβ1/SMAD3 signaling allow for a better understanding of the mechanisms that determine epithelial cell phenotypes in fibrogenesis and carcinogenesis as does the discovery of the direct effect of TGFβ1 on FOXA2.