Metastasis is a multistep process that involves local tumour invasion followed by dissemination to, and re-establishment at, distant sites. Here we show that during multistage tumorigenesis, discrete expression thresholds of activated Smad2 and H-ras are sequentially surpassed, driving tumour progression through distinct phases from a differentiated squamous carcinoma to a motile invasive stage, followed by an overt change from epithelial to mesenchymal cell type, finally culminating in metastatic tumour spread. Smad2 activation alone induces migration of tumour cells. Elevated H-ras levels, however, are required for nuclear accumulation of Smad2, both of which are essential for the epithelial mesenchymal transition (EMT). Having undergone EMT, fibroblastoid carcinoma cells with elevated levels of activated Smad2, gain the capability to spread to a wide variety of tissues by a further increase in Smad2 expression. These findings have far-reaching implications for the prevention of tumour growth, invasion and metastasis.