Transforming growth factor beta1 (TGF-beta1) acts as a tumor suppressor at early stages of carcinogenesis, however, it has also been suggested to promote tumor progression at late stages. To determine at which stage and by what mechanisms this functional switch occurs, we have generated gene-switch-TGF-beta1 mice in which TGF-beta1 transgene expression can be induced in skin tumors at specific stages. These mice were exposed to a chemical carcinogenesis protocol, which allows tumorigenesis to develop in progressive stages from benign papillomas to malignant carcinomas. Remarkably, TGF-beta1 transgene induction in papillomas rapidly induced metastasis. This function is in sharp contrast to its tumor suppressive effect when TGF-beta1 transgene expression was induced early in the protocol. Transgenic papillomas exhibited down-regulation of TGF-beta receptors and their signal transducer, the Smads, and loss of the invasion suppressor E-cadherin/catenin complex in the cell membrane. These molecules were lost only in malignant carcinomas in control mice at a much later stage. Furthermore, transgenic papillomas exhibited elevated expression of matrix metalloproteinases and increased angiogenesis. Our study suggests that TGF-beta1 overexpression may directly induce tumor metastasis by initiating events necessary for invasion. Down-regulation of TGF-beta signaling components in tumor epithelia selectively abolishes growth inhibition, thus, switching the role of TGF-beta1 to a metastasis promoter.