Transforming growth factor beta (TGF beta) is a tumor suppressor acting as inhibitor of cell cycle progression of epithelial cells. We show that treatment of the pancreatic carcinoma cell lines PANC-1 and BxPC-3 with TGF beta(1) inhibits both growth factor-induced activation of the extracellular signal-regulated kinase 2 (ERK2) and translocation of the kinase to the nucleus. TGF beta(1) causes a concentration-dependent reduction of cell proliferation in both cell lines, By measuring ERK activation, we can show that TGF beta(1) is able to repress ERK activation induced by mitogenic stimuli such as EGF, This inhibitory effect of TGF beta(1) is not mediated by suppression of Ras or c-Raf-1 activation, but mediated by TGF beta(1)-induced activation of a serine-threonine phosphatase, as demonstrated by inhibition of phosphatases by treatment with okadaic acid. Results obtained in the Smad4-deficient pancreatic carcinoma cell line BxPC-3, demonstrate that TGF beta(1)-induced growth inhibition is mediated by a Smad4-independent prevention of ERK2 activation. In contrast to the effects of TGF beta(1) on epithelial cells, mesenchymal NIH3T3 fibroblasts exhibit elevated ERK2 activation and increased cell proliferation in response to TGF beta(1) treatment, Smad4-independent phosphatase-mediated inhibition of mitogen-activated ERK2 represents a novel effector pathway contributing to suppression of epithelial pancreatic carcinoma cell proliferation by TGF beta(1), in addition to the well-known Smad-induced tumor suppressor activity of TGF beta.