Transforming growth factor beta (TGFbeta) plays a key role in maintaining tissue homeostasis by inducing cell cycle arrest, differentiation and apoptosis, and ensuring genomic integrity. Furthermore, TGFbeta orchestrates the response to tissue injury and mediates repair by inducing epithelial to mesenchymal transition and by stimulating cell motility and invasiveness. Although loss of the homeostatic activity of TGFbeta occurs early on in tumor development, many advanced cancers have coopted the tissue repair function to enhance their metastatic phenotype. How these two functions of TGFbeta become uncoupled during cancer development remains poorly understood. Here, we show that, in human keratinocytes, TGFbeta induces phosphorylation of Smad2 and Smad3 as well as Smad1 and Smad5 and that both pathways are dependent on the kinase activities of the type I and II TGFbeta receptors (T beta R). Moreover, cancer-associated missense mutations of the T beta RII gene (TGFBR2) are associated with at least two different phenotypes. One type of mutant (TGFBR2(E526Q)) is associated with loss of kinase activity and all signaling functions. In contrast, a second mutant (TGFBR2(R537P)) is associated with high intrinsic kinase activity, loss of Smad2/3 activation, and constitutive activation of Smad1/5. Furthermore, this TGFBR2 mutant endows the carcinoma cells with a highly motile and invasive fibroblastoid phenotype. This activated phenotype is T beta RI (Alk-5) independent and can be reversed by the action of a dual T beta RI and T beta RII kinase inhibitor. Thus, identification of such activated T beta RII receptor mutations in tumors may have direct implications for appropriately targeting these cancers with selective therapeutic agents.