Transforming growth factor (TGF)-β antagonizes mitogenic Ras signaling during epithelial regeneration, but TGF-β and Ras act synergistically in driving tumor progression. Insights into these apparently contradictory effects have come from recent detailed analyses of the TGF-β signaling process. Here, we summarize the different modes of TGF-β/Ras signaling in normal epithelium and neoplasms and show how perturbation of TGF-β signaling by Ras may contribute to a shift from tumor-suppressive to protumorigenic TGF-β activity during tumor progression. Smad proteins, which convey signals from TGF-β receptors to the nucleus, have intermediate linker regions between conserved Mad homology (MH) 1 and MH2 domains. TGF-β Type I receptor and Ras-associated kinases differentially phosphorylate Smad2 and Smad3 to create C-terminally (C), linker (L) or dually (L/C) phosphorylated (p) isoforms. In epithelial homeostasis, TGF-β-mediated pSmad3C signaling opposes proliferative responses induced by mitogenic signals. During carcinogenesis, activation of cytoplasmic Ras-associated kinases including mitogen-activated protein kinase confers a selective advantage on benign tumors by shifting Smad3 signaling from a tumor-suppressive pSmad3C to an oncogenic pSmad3L pathway, leading to carcinoma in situ. Finally, at the edges of advanced carcinomas invading adjacent tissues, nuclear Ras-associated kinases such as cyclin-dependent kinases, together with cytoplasmic kinases, alter TGF-β signals to more invasive and proliferative pSmad2L/C and pSmad3L/C signaling. Taken together, TGF-β signaling specificity arises from spatiotemporal dynamics of Smad phosphoisoforms. Based on these findings, we have reason to hope that pharmacologic inhibition of linker phosphorylation might suppress progression to human advanced carcinomas by switching from protumorigenic to tumor-suppressive TGF-β signaling.