Inactivating mutations of the tumor-suppressor kinase gene LKB1 underlie Peutz-Jeghers syndrome (PJS), which is characterized by gastrointestinal hamartomatous polyps with a prominent smooth-muscle and stromal component. Recently, it was noted that PJS-type polyps develop in mice in which Lkb1 deletion is restricted to SM22-expressing mesenchymal cells. Here, we investigated the stromal functions of Lkb1, which possibly underlie tumor suppression. Ablation of Lkb1 in primary mouse embryo fibroblasts (MEFs) leads to attenuated Smad activation and TGFbeta-dependent transcription. Also, myofibroblast differentiation of Lkb1(-/-) MEFs is defective, resulting in a markedly decreased formation of alpha-smooth muscle actin (SMA)-positive stress fibers and reduced contractility. The myofibroblast differentiation defect was not associated with altered serum response factor (SRF) activity and was rescued by exogenous TGFbeta, indicating that inactivation of Lkb1 leads to defects in myofibroblast differentiation through attenuated TGFbeta signaling. These results suggest that tumorigenesis by Lkb1-deficient SM22-positive cells involves defective myogenic differentiation.