Transforming growth factor-beta superfamily receptors signaling occurs through the Smad family of intracellular mediators. SMAD6 is an inhibitory Smad (i-Smad) that negatively regulates signaling downstream of type I transforming growth factor-beta (By similarity). Acts as a mediator of TGF-beta and BMP anti-inflammatory activities. Suppresses IL1R-TLR signaling through its direct interaction with PEL1, preventing NF-kappa-B activation, nuclear transport and NF-kappa-B-mediated expression of pro-inflammatory genes (PubMed:16951688). Blocks the BMP-SMAD1 signaling pathway by competing with SMAD4 for receptor-activated SMAD1-binding. Binds to regulatory elements in target promoter regions (By similarity). Interacts with NEDD4L. Interacts with WWP1. Interacts with STAMBP and PRKX (By similarity). Interacts with RNF111 and AXIN1. Interacts with TGF-beta type I receptor superfamily members, including ACVR1B, BMPR1B and TGFBR1. In response to BMP2 treatment, interacts with SMAD1; this interaction may inhibit SMAD1-binding to SMAD4. Interacts with HOXC8 and HOXC9 (By similarity). Interacts with PELI1; this interaction interferes with PELI1 complex formation with TRAF6, IRAK1, IRAK4 and MYD88 in response to IL1B and hence negatively regulates IL1R-TLR signaling. Ubiquitous in various organs, with higher levels in lung. By TGF-beta and BMP4. Monoubiquitinated at Lys-174 by the E2/E3 hybrid ubiquitin-protein ligase UBE2O, leading to reduced binding affinity for the activated BMP type I receptor ACVR1/ALK2, thereby enhancing BMP7 and regulating adipocyte differentiation (By similarity). Ubiquitinated by WWP1 (PubMed:15221015). Ubiquitinated by RNF165, promoting proteasomal degradation, leading to enhance the BMP-Smad signaling (PubMed:23610558). Arginine methylation by PRMT1, which is recruited by BMPR2, initiates BMP-Induced signaling and induces dissociation from the BMPR1B receptor at the cell surface leading to derepress downstream Smad1/Smad5 signaling. Phosphorylated by BMP type 1 receptor kinase and by PRKX. Belongs to the dwarfin/SMAD family.