Loss of growth inhibitory responses to the cytokine transforming growth factor beta (TGF-beta) in cancer cells may result from mutational inactivation of TGF-beta receptors or their signal transducers, the Smad transcription factors. In breast cancer, however, loss of TGF-beta growth inhibition often occurs without a loss of these signaling components. A genome-wide analysis of rapid TGF-beta gene responses in MCF-10A human mammary epithelial cells and MDA-MB-231 breast cancer cells shows that c-myc repression, a response that is key to the TGF-beta program of cell cycle arrest, is selectively lost in the cancer cell line. Transformation of MCF-10A cells with c-Ha-ras and c-erbB2 oncogenes also led to a selective loss of c-myc repression and cell cycle arrest response. TGF-beta stimulation of epithelial cells rapidly induces the formation of a Smad complex that specifically recognizes a TGF-beta inhibitory element in the c-myc promoter. Formation of this complex is deficient in the oncogenically transformed breast cells. These results suggest that a Smad complex that specifically mediates c-myc repression is a target of oncogenic signals in breast cancer.