Epithelial-mesenchymal transition (EMT) contributes to normal tissue patterning and carcinoma invasiveness. We show that transforming growth factor (TGF)-beta/activin members, but not bone morphogenetic protein (BMP) members, can induce EMT in normal human and mouse epithelial cells. EMT correlates with the ability of these ligands to induce growth arrest. Ectopic expression of all type I receptors of the TGF-beta superfamily establishes that TGF-beta but not BMP pathways can elicit EMT. Ectopic Smad2 or Smad3 together with Smad4 enhanced, whereas dominant-negative forms of Smad2, Smad3, or Smad4, and wild-type inhibitory Smad7, blocked TGF-beta-induced EMT. Transcriptomic analysis of EMT kinetics identified novel TGF-beta target genes with ligand-specific responses. Using a TGF-beta type I receptor that cannot activate Smads nor induce EMT, we found that Smad signaling is critical for regulation of all tested gene targets during EMT. One such gene, Id2, whose expression is repressed by TGF-beta1 but induced by BMP-7 is critical for regulation of at least one important myoepithelial marker, alpha-smooth muscle actin, during EMT. Thus, based on ligand-specific responsiveness and evolutionary conservation of the gene expression patterns, we begin deciphering a genetic network downstream of TGF-beta and predict functional links to the control of cell proliferation and EMT.