We have previously shown that expression of a dominant-negative type II transforming growth factor-beta receptor (DNIIR) in mammary epithelium under control of the MMTV promoter/enhancer causes alveolar hyperplasia and differentiation in virgin mice. Here we show that MMTV-DNIIR female mice have accelerated mammary gland differentiation during early pregnancy with impaired development during late pregnancy and lactation followed by delayed postlactational involution. Mammary tumors, mostly carcinoma in situ, developed spontaneously in the MMTV-DNIIR mice with a long median latency (27.5 months). Crossbreeding to MMTV-transforming growth factor (TGF)-alpha mice to obtain mice expressing both transgenes resulted in mammary tumor formation with a much shorter latency more similar to those expressing only the MMTV-TGF-alpha transgene (<10 months median latency). The major difference in mammary tumors arising in MMTV-TGF-alpha compared to bigenic MMTV-DNIIR/MMTV-TGF-alpha was the marked suppression of tumor invasion by DNIIR transgene expression. Invading carcinoma cells in both MMTV-DNIIR and bigenic animals showed loss of DNIIR transgene expression as determined by in situ hybridization. The data indicate that signaling from endogenous TGF-betas not only plays an important role in normal mammary gland physiology but also can also suppress the early stage of tumor formation and contribute to tumor invasion once carcinomas have developed.