We have examined the effects of transforming growth factor-beta (TGFbeta) signaling on mammary epithelial cell survival. Transgenic mice expressing an active mutant of Alk5 in the mammary gland (MMTV-Alk5(T204D)) exhibited reduced apoptosis in terminal endbuds and during postlactational involution. Transgene-expressing mammary cells contained lower Smad2/3 and higher c-myc levels than controls, high ligand-independent phosphatidylinositol-3 kinase (PI3K) and Akt activities, and were insensitive to TGFbeta-mediated growth arrest. Treatment with a proteasome inhibitor increased Smad2/3 levels and ligand-independent Smad transcriptional reporter activity, as well as reduced both c-myc protein and basal cell proliferation. Treatment with an Alk5 kinase small-molecule inhibitor upregulated Smad2/3 levels, reduced PI3K activity, P-Akt, and c-myc, and inhibited cell survival. Although Alk5(T204D)-expressing mice did not develop mammary tumors, bigenic MMTV-Alk(T204D) x Neu mice developed cancers that were more metastatic than those occurring in MMTV-Neu transgenics. These data suggest that (1) TGFbeta can signal to PI3K/Akt and enhance mammary epithelial cell survival in vivo before cytological or histological evidence of transformation, and (2) TGFbeta signaling can provide epithelial cells with a 'gain-of-function' effect that synergizes with oncogene-induced transformation.