Cleft palate is among the most common birth defects in humans, caused by a failure in the complex multistep developmental process of palatogenesis. It has been recently shown that transforming growth factor beta3 (Tgf-beta3) is an absolute requirement for successful palatal fusion, both in mice and humans. However, very little is known about the mechanisms of Tgf-beta3 signaling during this process. Here we show that putative Tgf-beta type I receptors, Alk-1, Alk-2, and Alk-5, are all endogenously expressed in the palatal epithelium. Activation of Alk-5 in the Tgf-beta3 (-/-) palatal epithelium is able to rescue palatal fusion, whereas inactivation of Alk-5 in the wild-type palatal epithelium prevents palatal fusion. The effect of Alk-2 is similar, but less pronounced. The induction of fusion by activation of Alk-5 or Alk-2 is stronger in the posterior parts of the palates at the embryonic day 14 (E14), while their activation at E13.5 also restores anterior fusion, reflecting the natural anterior-posterior direction of palate maturation in vivo. We also show that Smad2 is endogenously activated in the palatal midline epithelial seam (MES) during the fusion process. By using a mutant Alk-5 receptor that is an active kinase but is unable to activate Smads, we show that activation of Smad-independent Tgf-beta responses is not sufficient to induce fusion of shelves deficient in Tgf-beta3. Based on these observations, we conclude that the Smad2-dependent Alk-5 signaling pathway is dominant in palatal fusion driven by Tgf-beta3.