The transforming growth factor beta (TGF-β) family of ligands plays major roles in embryonic development, tissue homeostasis, adult immunity, and wound repair. Dysregulation of TGF-β signaling pathway leads to severe diseases. Its key components have been revealed over the past two decades. This family of cytokines acts by activating receptor activated SMAD (R-SMAD) transcription factors, which in turn modulate the expression of specific sets of target genes. Cells of a multicellular organism have the same genetic information, yet they show structural and functional differences owing to differential expression of their genes. Studies have demonstrated that epigenetic regulation, an integral part of the TGF-β signaling, enables cells to sense and respond to TGF-β signaling in a cell context-dependent manner. R-SMAD, as the central transcription factor of TGF-β signaling, can recruit various epigenetic regulators to shape the transcriptome. In this review, we focus on epigenetic regulatory mechanisms in the TGF-β signaling during mammalian development and diseases and discuss the central role of the interaction between R-SMAD and various epigenetic regulators in this epigenetic regulation. The crosstalk between TGF-β signaling and the epigenome could serve as a versatile fine-tuning mechanism for transcriptional regulation during embryonic development and progression of diseases, particularly cancer.