Model of differential SMAD signaling activity in human respiratory epithelial cells. In a simplified model of human airway epithelium, basal cells give rise to club cells, which subsequently differentiate into ciliated cells or goblet cells, depending on environmental signals. SMAD signaling is suppressed in immature basal cells. During the differentiation of basal cells into club cells and ciliated cells, SMAD signaling increases in parallel with increasing maturity. During the differentiation of goblet cells from club cells, SMAD signaling is decreased. This model proposes that SMAD signaling changes in club cells drive the determination of whether club cells will give rise to ciliated cells or goblet cells.