The ability of the transforming growth factor beta (TGF-beta) signaling pathways to inhibit proliferation of most cells while stimulating proliferation of others remains a conundrum. In this article, we report that the absence of RhoA and p160ROCK activity in fibroblastic NIH 3T3 cells and its presence in epithelial NMuMG cells can at least partially explain the difference in the TGF-beta growth response. Further, evidence is presented for TGF-beta-stimulated p160ROCK translocation to the nucleus and inhibitory phosphorylation of the cyclin-dependent kinase-activating phosphatase, Cdc25A. The resultant suppression of Cdk2 activity contributes to G1/S inhibition in NMuMG cells. These data provide evidence that signaling through RhoA and p160ROCK is important in TGF-beta inhibition of cell proliferation and links signaling components for epithelial transdifferentiation with regulation of cell-cycle progression.