Signaling from transforming growth factor-beta (TGF-beta) through its unique transmembrane receptor serine-threonine kinases plays a complex role in carcinogenesis, having both tumor suppressor and oncogenic activities. Tumor cells often escape from the antiproliferative effects of TGF-beta by mutational inactivation or dysregulated expression of components in its signaling pathway. Decreased receptor function and altered ratios of the TGF-beta type I and type II receptors found in many tumor cells compromise the tumor suppressor activities of TGF-beta and enable its oncogenic functions. Recent identification of a family of intracellular mediators, the Smads, has provided new paradigms for understanding mechanisms of subversion of TGF-beta signaling by tumor cells. In addition, several proteins recently have been identified that can modulate the Smad-signaling pathway and may also be targets for mutation in cancer. Other pathways such as various mitogen-activated protein kinase cascades also contribute substantially to TGF-beta signaling. Understanding the interplay between these signaling cascades as well as the complex patterns of cross-talk with other signaling pathways is an important area of investigation that will ultimately contribute to understanding of the bifunctional tumor suppressor/oncogene role of TGF-beta in carcinogenesis.