The signaling pathway mediated by transforming growth factor-beta (TGF-beta) participates in various biologic processes, including cell growth, differentiation, angiogenesis, apoptosis, and extracellular matrix remodeling. In the context of cancer, TGF-beta signaling can inhibit tumor growth in early-stage tumors. However, in late-stage tumors, the very same pathway promotes tumor invasiveness and metastasis. This paradoxical effect is mediated through similar to mothers against decapentaplegic or Smad protein dependent and independent mechanisms and provides an opportunity for targeted cancer therapy. This review summarizes the molecular process of TGF-beta signaling and the changes in inhibitory Smads that contribute to lung cancer progression. We also present current approaches for rational therapies that target the TGF-beta signaling pathway in cancer.