decapentaplegic (dpp), a Drosophila member of the TGFbeta family of secreted molecules, functions as a long-range morphogen in patterning of the embryo and the adult appendages. Dpp signals via the SMAD proteins Mad and Medea. Here we show that in the absence of brinker (brk), Mad is not required for the activation of Dpp target genes that depend on low levels of Dpp. brk encodes a novel protein with features of a transcriptional repressor. brk itself is negatively regulated by Dpp. Dpp signaling might relieve brk's repression of low-level target genes either by transcriptional repression of brk or by antagonizing a repressor function of brk at the target gene promoters.