Binds the TRE element in the promoter region of many genes that are regulated by TGF-beta and, on formation of the SMAD3/SMAD4 complex, activates transcription. Also can form a SMAD3/SMAD4/JUN/FOS complex at the AP-1/SMAD site to regulate TGF-beta-mediated transcription. Has an inhibitory effect on wound healing probably by modulating both growth and migration of primary keratinocytes and by altering the TGF-mediated chemotaxis of monocytes. This effect on wound healing appears to be hormone-sensitive. Regulator of chondrogenesis and osteogenesis and inhibits early healing of bone fractures. Positively regulates PDPK1 kinase activity by stimulating its dissociation from the 14-3-3 protein YWHAQ which acts as a negative regulator. Receptor-regulated SMAD (R-SMAD) that is an intracellular signal transducer and transcriptional modulator activated by TGF-beta (transforming growth factor) and activin type 1 receptor kinases.