Pulmonary artery hypertension (PAH), a progressive, lethal condition that results in pathologic changes in the pulmonary arterial tree, eventually leads to right heart failure. Work identifying mutations in the Type II Bone morphogenetic protein (Bmp) receptor, BmpRII, in families with PAH has implicated Bmp-signaling in the pathogenesis of PAH. However, the effectors downstream of BmpRII in PAH remain unclear since BmpRII signals via Smad-dependent and independent mechanisms. We investigated Smad8 function, a divergent receptor regulated Smad downstream of Bmp-signaling, using gene targeting in mice. We show that Smad8 loss of function in adults resulted in characteristic changes in distal pulmonary arteries including medial thickening and smooth muscle hyperplasia that is observed in patients with PAH. Smad8 mutant pulmonary vasculature had upregulated Activin/Tgfbeta signaling and pathologic remodeling with aberrant Prx1 and Tenascin-C expression. A subset of Smad8 mutants had pulmonary adenomas uncovering a function for Smad8 in normal growth control. These findings implicate Smad8 in both pulmonary hypertension and lung tumorigenesis and support Smad8 as a candidate gene for PAH in humans.