Phosphorylation and subsequent nuclear translocation of SMAD proteins determine the cellular response to activin. Here we identify a novel means by which activin signalling is regulated to enable developmental stage-specific SMAD gene transcription. In response to activin A, immature proliferating mouse Sertoli cells exhibit nuclear accumulation of SMAD3, but not SMAD2, although both proteins are phosphorylated. In post-mitotic differentiating cells, both SMAD2 and SMAD3 accumulate in the nucleus. Furthermore, immature Sertoli cells are sensitive to activin dosage; at higher concentrations maximal SMAD3 nuclear accumulation is observed, accompanied by a small, but significant, increase in nuclear SMAD2. Microarray analysis confirmed that differential SMAD utilization correlated with altered transcriptional outcomes and identified new activin target genes, Gja1 and Serpina5, which are known to be required for Sertoli cell development and male fertility. In immature Sertoli cells, genetic or transient knockdown of SMAD3 enhanced SMAD2 nuclear accumulation in response to activin, with increased Serpina5 mRNA levels associated with nuclear localized SMAD2. In transgenic mice with altered activin bioactivity that display male fertility phenotypes, testicular Gja1 and Serpina5 mRNA levels reflected altered in vivo activin levels. We conclude that regulated nuclear accumulation of phosphorylated SMAD2 is a novel determinant of developmentally regulated activin signalling.