Inhibin and activin are members of the TGF beta family that perform mutually antagonistic signaling roles in the anterior pituitary, gonads, and adrenal gland. Unopposed activin signaling in inhibin- null ( Inha-/-) mice causes the formation of granulosa cell tumors in the gonads and adrenal cortex, which depend upon FSH for efficient growth and progression. In this study, we demonstrate that Smad3, a key effector of activin signaling, is expressed at high levels and is constitutively activated in tumors from these mice. Removal of Smad3 from Inha-/- mice by a genetic cross to Smad3- null ( Madh3-/-) mice leads to a significant decrease in cyclinD2 expression and a significant attenuation of tumor progression in the gonads and adrenal. The decrease in cyclinD2 levels in compound knockout mice is related to a reduction in mitogenic signaling through the phosphoinositide3- kinase ( PI3- kinase)/ Akt pathway, which is required for normal cell cycle progression in tumor cells. Loss of PI3- kinase/ Akt signaling cannot be attributed to alterations in IGF expression, suggesting instead that signaling through the FSH receptor is attenuated. Gene expression profiling in the ovaries of Madh3-/- and Inha-/-: Madh3-/- compound knockout mice supports this hypothesis and further suggests that Smad3 is specifically required for FSH to activate PI3- kinase/ Akt, but not protein kinase A. Together these observations imply that activin/ Smad3 signaling is necessary for efficient signaling by FSH in Inha -/- tumor cells and that interruption of this pathway uncouples FSH from its intracellular mitogenic effectors.