Transforming growth factor beta (TGF-beta) inhibits myogenesis and associated gene expression. We previously reported that the TGF-beta signaling effector Smad3 mediates this inhibition, by interfering with the assembly of myogenic bHLH transcription factor heterodimers on E-box sequences in the regulatory regions of muscle-specific genes. We now show that TGF-beta-activated Smad3 suppresses the function of MEF2, a second class of essential myogenic factors. TGF-beta signaling through Smad3 represses myogenin expression independently of E-boxes, and prevents a tethered MyoD-E47 dimer to activate transcription indirectly through MEF2-binding sites. In addition, Smad3 interacts with MEF2C, which requires its MADS domain, and disrupts its association with the SRC-family coactivator GRIP-1, thus diminishing the transcription activity of MEF2C. Consistent with this physical displacement, TGF-beta signaling blocks the GRIP-1-induced redistribution of MEF2C to discrete nuclear subdomains in 10T1/2 cells, and the recruitment of GRIP-1 to the myogenin promoter in differentiating myoblasts. These findings indicate that the TGF-beta/Smad3 pathway targets two critical components of the myogenic transcription machinery to inhibit terminal differentiation.