Renal fibrosis is the common pathway of most chronic kidney disease progression to end-stage renal failure. The nuclear receptor FXR (farnesoid X receptor), a multiple functional transcription factor, plays an important role in protecting against fibrosis. The TGFβ-Smad signaling has a central role in kidney fibrosis. However, it remains unclear whether FXR plays direct anti-fibrotic effect in renal fibrosis via regulating TGFβ-Smad pathway. In this study, we found that the level of FXR was negatively correlated with that of Smad3 and fibronectin (a marker of fibrosis) in human fibrotic kidneys. Activation of FXR suppressed kidney fibrosis and downregulated Smad3 expression, which was markedly attenuated by FXR antagonist. Moreover, the FXR-mediated repression of fibrosis was significantly alleviated by ectopic expression of Smad3. Luciferase reporter assay revealed that FXR activation inhibited the transcriptional activity of Smad3 gene promoter. The in vivo experiments showed that FXR agonist protected against renal fibrosis and downregulated Smad3 expression in UUO mice. These results suggested that FXR may serve as an important negative regulator for manipulating Smad3 expression, and the FXR/Smad3 pathway may be a novel target for the treatment of renal fibrosis.