Alternative splicing contributes to diversification of gene function, yet consequences of splicing on functions of specific gene products is poorly understood. The major transcription factor TCF7L2 undergoes alternative splicing but the biological significance of TCF7L2 isoforms has remained largely to be elucidated. Here, we find that the TCF7L2 E-isoforms maintain, whereas the M and S isoforms disrupt morphogenesis of 3D-epithelial cell-derived organoids via regulation of epithelial-mesenchymal transition (EMT). Remarkably, TCF7L2E2 antagonizes, whereas TCF7L2M2/S2 promotes EMT-like effects in epithelial cells induced by transforming growth factor beta (TGFβ) signaling. In addition, we find TGFβ signaling reduces the proportion of TCF7L2E to TCF7L2M/S protein in cells undergoing EMT. We also find that TCF7L2 operates via TGFβ-Smad3 signaling to regulate EMT. Collectively, our findings unveil novel isoform-specific functions for the major transcription factor TCF7L2 and provide novel links between TCF7L2 and TGFβ signaling in the control of EMT-like responses and epithelial tissue morphogenesis.