The TGFβ pathway is critical for embryonic development and adult tissue homeostasis. On ligand stimulation, TGFβ and BMP receptors phosphorylate receptor-activated SMADs (R-SMADs), which then associate with SMAD4 to form a transcriptional complex that regulates gene expression through specific DNA recognition. Several ubiquitin ligases serve as inhibitors of R-SMADs, yet no deubiquitylating enzyme (DUB) for these molecules has so far been identified. This has left unexplored the possibility that ubiquitylation of R-SMADs is reversible and engaged in regulating SMAD function, in addition to degradation. Here we identify USP15 as a DUB for R-SMADs. USP15 is required for TGFβ and BMP responses in mammalian cells and Xenopus embryos. At the biochemical level, USP15 primarily opposes R-SMAD monoubiquitylation, which targets the DNA-binding domains of R-SMADs and prevents promoter recognition. As such, USP15 is critical for the occupancy of endogenous target promoters by the SMAD complex. These data identify an additional layer of control by which the ubiquitin system regulates TGFβ biology.