While it is thought that advanced glycation end products (AGEs) act by stimulating transforming growth factor (TGF)-beta to mediate diabetic injury, we report that AGEs can activate TGF-beta signaling, Smads, and mediate diabetic scarring directly and independently of TGF-beta. AGEs activate Smad2/3 in renal and vascular cells at 5 min, peaking over 15-30 min before TGF-beta synthesis at 24 h and occurs in TGF-beta receptor I and II mutant cells. This is mediated by RAGE and ERK/p38 mitogen-activated protein kinases (MAPKs). In addition, AGEs also activate Smads at 24 h via the classic TGF-beta-dependent pathway. A substantial inhibition of AGE-induced Smad activation and collagen synthesis by ERK/p38 MAPK inhibitors, but not by TGF-beta blockade, suggests that the MAPK-Smad signaling crosstalk pathway is a key mechanism in diabetic scarring. Prevention of AGE-induced Smad activation and collagen synthesis by overexpression of Smad7 indicates that Smad signaling may play a critical role in diabetic complications. This is further supported by the findings that activation of Smad2/3 in human diabetic nephropathy and vasculopathy is associated with local deposition of AGEs and up-regulation of RAGE. Thus, AGEs act by activating Smad signaling to mediate diabetic complications via both TGF-beta-dependent and -independent pathways, shedding new light on the pathogenesis of diabetic organ injury.