Transforming growth factor (TGF)-beta is a natural and potent growth inhibitor of a variety of cell types, including epithelial, endothelial, and hematopoietic cells. The ability of TGF-beta to potently inhibit the growth of many solid tumors of epithelial origin, including breast and colon carcinomas, is of particular interest. However, many solid tumor cells become refractory to the growth inhibitory effects of TGF-beta due to defects in TGF-beta signaling pathways. In addition, TGF-beta may stimulate the invasiveness of tumor cells via the paracrine effects of TGF-beta. Accordingly, in order to develop more effective anticancer therapeutics, it is necessary to determine the TGF-beta signal transduction pathways underlying the growth inhibitory effects and other cellular effects of TGF-beta in normal epithelial cells. Thus far, two primary signaling cascades downstream of the TGF-beta receptors have been elucidated, the Sma and mothers against decapentaplegic homologues and the Ras/mitogen-activated protein kinase pathways. The major objective of this review is to summarize TGF-beta signaling in epithelial cells, focusing on recent advances involving the Sma and mothers against decapentaplegic homologues and Ras/mitogen-activated protein kinase pathways. This review is particularly timely in that it provides a comprehensive summary of both signal transduction mechanisms and the cell cycle effects of TGF-beta.