Activin A (Act A) is a member of the TGFβ superfamily. Act A and TGFβ have multiple common downstream targets and have been described to merge in their intracellular signaling cascades and function. We have previously demonstrated that coordinated loss of E-cadherin and TGFβ receptor II (TβRII) results in epithelial cell invasion. When grown in three-dimensional organotypic reconstruct cultures, esophageal keratinocytes expressing dominant-negative mutants of E-cadherin and TβRII showed activated Smad2 in the absence of functional TβRII. However, we could show that increased levels of Act A secretion was able to induce Smad2 phosphorylation. Growth factor secretion can activate autocrine and paracrine signaling, which affects crosstalk between the epithelial compartment and the surrounding microenvironment. We show that treatment with the Act A antagonist Follistatin or with a neutralizing Act A antibody can increase cell invasion in organotypic cultures in a fibroblast- and MMP-dependent manner. Similarly, suppression of Act A with shRNA increases cell invasion and tumorigenesis in vivo. Therefore, we conclude that maintaining a delicate balance of Act A expression is critical for homeostasis in the esophageal microenvironment.