Development of acquired resistance to tamoxifen is a major clinical problem during endocrine treatment in estrogen receptor positive breast cancer. Transforming growth factor-beta1 (TGF-beta) has been implicated in tamoxifen-induced cellular signaling in breast cancer, and increased Akt activation is associated with tamoxifen-resistant cell types. We hypothesized that the relationship between TGF-beta and Akt signaling may be involved in the development and progression of tamoxifen resistance. Tamoxifen-resistant (Tam-R) cells were established from parental MCF-7 cells by continuously exposing them to 4-hydroxytamoxifen (4-OHT). Tam-R cells were associated with a decrease in TGF-beta1 secretion, TGF-beta-mediated transcriptional response, and growth inhibitory effects of 4-OHT. Tam-R cells expressed significantly higher levels of phosphorylated Akt and lower levels of phosphorylated Smad 3 in both the absence and presence of 4-OHT when compared to MCF-7 cells treated with 4-OHT. Ectopic expression of constitutively active Akt (Myc-Akt(Myr)) rendered MCF-7 cells resistant to activation by TGF-beta and the growth inhibitory effects of 4-OHT, while over-expression of kinase-dead Akt (Myc-Akt(K179M)) or LY294002 treatment of Tam-R cells enhanced TGF-beta activation and blocked cell growth. These results suggest that suppression of TGF-beta signaling by activated Akt is correlated with the development of tamoxifen resistance in breast cancer.