The DPC4(SMAD4) gene plays a key role in the TGFβ signaling pathway. We inactivated its mouse homolog Dpc4(Smad4). The homozygous mutants were embryonic lethal, whereas the heterozygotes showed no abnormality. We then introduced the Dpc4 mutation into the Apc^Δ716knockout mice, a model for human familial adenomatous polyposis. Because both Apc and Dpc4 are located on chromosome 18, we constructed compound heterozygotes carrying both mutations on the same chromosome by meiotic recombination. In such mice, intestinal polyps developed into more malignant tumors than those in the simple Apc^Δ716heterozygotes, showing an extensive stromal cell proliferation, submucosal invasion, cell type heterogeneity, and in vivo transplantability. These results indicate that mutations in DPC4(SMAD4) play a significant role in the malignant progression of colorectal tumors.