Despite the tremendous progress of chimeric antigen receptor T (CAR-T) cell therapy in hematological malignancies, their application in solid tumors has been limited largely due to T-cell exhaustion in the tumor microenvironment (TME) and systemic toxicity caused by excessive cytokine release. As a key regulator of the immunosuppressive TME, TGF-β promotes cytokine synthesis via the NF-κB pathway. Here, we coexpressed SMAD7, a suppressor of TGF-β signaling, with a HER2-targeted CAR in engineered T cells. These novel CAR-T cells displayed high cytolytic efficacy and were resistant to TGF-β-triggered exhaustion, which enabled sustained tumoricidal capacity after continuous antigen exposure. Moreover, SMAD7 substantially reduced the production of inflammatory cytokines by antigen-primed CAR-T cells. Mechanistically, SMAD7 downregulated TGF-β receptor I and abrogated the interplay between the TGF-β and NF-κB pathways in CAR-T cells. As a result, these CAR-T cells persistently inhibited tumor growth and promoted the survival of tumor-challenged mice regardless of the hostile tumor microenvironment caused by a high concentration of TGF-β. SMAD7 coexpression also enhanced CAR-T-cell infiltration and persistent activation in patient-derived tumor organoids. Therefore, our study demonstrated the feasibility of SMAD7 coexpression as a novel approach to improve the efficacy and safety of CAR-T-cell therapy for solid tumors.