The TGFbeta receptors signal through phosphorylation and nuclear translocation of SMAD2/3. SMAD7, a transcriptional target of TGFbeta signals, negatively regulates the TGFbeta pathway by recruiting E3 ubiquitin ligases and targeting TGFbeta receptors for ubiquitin-mediated degradation. In this report, we identify a deubiquitylating enzyme USP11 as an interactor of SMAD7. USP11 enhances TGFbeta signalling and can override the negative effects of SMAD7. USP11 interacts with and deubiquitylates the type I TGFbeta receptor (ALK5), resulting in enhanced TGFbeta-induced gene transcription. The deubiquitylase activity of USP11 is required to enhance TGFbeta-induced gene transcription. RNAi-mediated depletion of USP11 results in inhibition of TGFbeta-induced SMAD2/3 phosphorylation and TGFbeta-mediated transcriptional responses. Central to TGFbeta pathway signalling in early embryogenesis and carcinogenesis is TGFbeta-induced epithelial to mesenchymal transition. USP11 depletion results in inhibition of TGFbeta-induced epithelial to mesenchymal transition.