TGFbeta overexpression in human cancer cells has been shown to promote tumor progression. In the present study, we sought to determine whether sequestration of endogenous TGFbeta by the expression of a soluble TGFbeta type III receptor (sRIII), can reduce malignancy in human carcinoma cells and whether the tumor-suppressive activity of sRIII is associated with the inhibition of angiogenesis. Ectopic expression of sRIII significantly inhibited the growth of tumors formed by human colon carcinoma HCT116 and breast carcinoma MDA-MB-435 cells in nude mice. It also reduced the metastatic potential of the MDA-MB-435 cells. Thus, endogenous TGFbeta appears to be necessary for the progression of these two carcinomas. Furthermore, when the tumor cells were mixed with Matrigel and embedded subcutaneously in nude mice, the blood volume in Matrigel plugs containing sRIII-expressing cells as indicated by hemoglobin levels was significantly lower than that in Matrigel plugs containing the respective control cells. Blood vessel counts in paraffin sections of the Matrigel plugs containing sRIII-expressing cells were also significantly lower than those in paraffin sections of the Matrigel plugs containing control cells. Treatment of human endothelial cells with a recombinant sRIII significantly inhibited their ability to form a capillary web structure on Matrigel. These results for the first time indicate that the sRIII-induced tumor suppression appears to be in part due to the inhibition of angiogenesis.