Transforming growth factor β (TGF-β) physiologically induces Epstein-Barr virus (EBV) lytic infection by activating the expression of EBV's latent-lytic switch BZLF1 gene. Liang et al. (J. Biol. Chem. 277:23345-23357, 2002) previously identified a Smad-binding element (SBE) within the BZLF1 promoter, Zp; however, it accounts for only 20 to 30% of TGF-β-mediated activation of transcription from Zp. Here, we identified additional factors responsible for the rest of this activation. The incubation of EBV-positive MutuI cells with a TGF-β neutralizing antibody or inhibitors of the TGF-β type I receptor (TβRI) or Smad3 eliminated the TGF-β-induced reactivation of EBV. The coexpression of Smad2, Smad3, and Smad4 together with a constitutively active form of TβRI induced 15- to 25-fold transcription from Zp in gastric carcinoma AGS cells. By electrophoretic mobility shift assays, we identified four additional Smad-binding elements, named SBE2 to SBE5. Substitution mutations in individual SBEs reduced Smad-mediated activation of Zp by 20 to 60%; together, these mutations essentially eliminated it. Chromatin immunoprecipitation assays confirmed that Smad4 newly bound the Zp region of the EBV genome following the incubation of MutuI cells with TGF-β. SBE2 overlaps the ZEB-binding ZV silencing element of Zp. Depending upon posttranslational modifications, Smad4 either competed with ZEB1 for binding or formed a complex with ZEB1 on the Zp ZV element in a cell-free assay system. In transiently transfected cells, exogenously expressed ZEB1 inhibited Smad-mediated transcriptional activation from Zp. We conclude that TGF-β induces EBV lytic reactivation via the canonical Smad pathway by activating BZLF1 gene expression through multiple SBEs acting in concert.