Ligands of the TGF-beta superfamily are unique in that they signal through transmembrane receptor serine-threonine kinases, rather than tyrosine kinases. The receptor complex couples to a signal transduction pathway involving a novel family of proteins, the Smads. On phosphorylation, Smads translocate to the nucleus where they modulate transcriptional responses. However, TGF-betas can also activate the mitogen-activated protein kinase (MAPK)4 pathway, and the different biological responses to TGF-beta depend to varying degrees on activation of either or both of these two pathways. The Smad pathway is a nexus for cross-talk with other signal transduction pathways and for modulation by many different interacting proteins. Despite compelling evidence that TGF-beta has tumor suppressor activity in the mammary gland, neither TGF-beta receptors nor Smads are genetically inactivated in human breast cancer, though receptor expression is reduced. Possible reasons are discussed in relation to the dual role of TGF-beta as tumor suppressor and oncogene.