Transforming growth factor β (TGFβ) regulates many physiological processes and requires control mechanisms to safeguard proper and timely action. We have previously described how negative regulation of TGFβ signaling is controlled by the serine/threonine kinase salt-inducible kinase 1 (SIK1). SIK1 forms complexes with the TGFβ type I receptor and with the inhibitory Smad7 and down-regulates the type I receptor. We now demonstrate that TGFβ induces SIK1 levels via a direct transcriptional mechanism that implicates the Smad proteins, and we have mapped a putative enhancer element on the SIK1 gene. We provide evidence that the ubiquitin ligase Smurf2 forms complexes and functionally cooperates with SIK1. Both the kinase activity of SIK1 and the ubiquitin ligase activity of Smurf2 are important for proper type I receptor turnover. We also show that knockdown of endogenous SIK1 and Smurf2 enhances physiological signaling by TGFβ that leads to epithelial growth arrest. In conclusion, TGFβ induces expression of Smad7, Smurf2, and SIK1, the products of which physically and functionally interlink to control the activity of this pathway.