The Sloan Kettering Virus (Ski) family of nuclear oncoproteins represses transforming growth factor-beta (TGF-beta) signaling through inhibition of transcriptional activity of Smad proteins. Here, we report the discovery of a new functional Smad suppressing element on chromosome 18 (Fussel-18). Fussel-18 encodes for a protein of 297 amino acids sharing characteristic structural features, significant homology and similar genomic organization with the homolog Ski family members, Ski and Ski-related novel sequence (Sno). In contrast to Ski and Sno, which are ubiquitously expressed in human tissues, in situ hybridization, RT-PCR, Western blot and immunohistochemistry revealed a highly specific expression pattern for Fussel-18 in neuronal tissues, especially in the cerebellum, the spinal cord and dorsal root ganglia, during both embryogenesis and adult stage. Functionally, we determined interaction of Fussel-18 with Smad 2 and Smad 3 together with an inhibitory activity on TGF-beta signaling. Fussel-18 is the first example of a Smad-binding protein with a highly restricted expression pattern within the nervous system.