Transforming growth factor (TGF)-betas are multifunctional growth factors, the properties of which include the potent inhibition of epithelial cell growth. Expression patterns of TGF-betas and TGF-beta receptors in the normal prostate indicate that these growth regulators play key roles in prostatic development and proliferative homeostasis. Importantly, TGF-beta receptor levels are frequently diminished in malignant human prostate tissue. To test the hypothesis that loss of TGF-beta responsiveness is causally involved in the tumorigenic process, we have used retroviral transduction to introduce a dominant-negative mutant type II TGF-beta receptor (DNR) into the premalignant rat prostatic epithelial cell line, NRP-152. High-level expression of the DNR abolished the ability of TGF-beta to inhibit cell growth, to promote cell differentiation, and to induce apoptosis, and it partially blocked the induction of extracellular matrix gene expression. When injected into nude mice, NRP-152-DNR cells formed carcinomas at 13 of 34 sites, compared with 0 of 30 sites for parental and control cells (P = 0.0001). We conclude that the type II TGF-beta receptor is an important tumor suppressor in the prostate, and furthermore, that loss of TGF-beta responsiveness can contribute early in the tumorigenic process by causing the malignant transformation of preneoplastic cells.