The transforming growth factor-beta (TGF-beta)-Smad signaling pathway has an important role in carcinogenesis. To study the frequency and mechanism of functional impairment of this pathway in human gastrointestinal cancers, we used a reporter assay to examine the response of 38 cell lines (11 colorectal, 9 pancreatic, 10 gastric, and 8 hepatic cancers) to TGF-beta. We then analyzed TGF-beta type II receptor (T beta RII) gene, immunoblots of Smad4, and restoration of the pathway by rescuing T betaR or Smad. We observed impaired signaling in 91% of colorectal, 67% of pancreatic, and 40% of gastric cancer cell lines, but in none of the hepatic cancer cells. We suggest that this pathway does not function as a tumor suppressor in hepatic carcinogenesis. The impairment is due to inactivation of T beta RII and Smad4 in colorectal and pancreatic cancers. However, because the signal was not recovered by rescuing T betaR or Smad genes in TGF-beta -response-defective gastric cancer cell lines, we suggest that novel molecules or mechanisms are involved in the impaired pathway in some gastric cancers.