Transforming growth factor-β1 (TGF-β) can be tumor suppressive, but it can also enhance tumor progression by stimulating the complex process of epithelial-to-mesenchymal transdifferentiaion (EMT). The signaling pathway(s) that regulate EMT in response to TGF-β are not well understood. We demonstrate the acquisition of a fibroblastoid morphology, increased N-cadherin expression, loss of junctional E-cadherin localization, and increased cellular motility as markers for TGF-β–induced EMT. The expression of a dominant-negative Smad3 or the expression of Smad7 to levels that block growth inhibition and transcriptional responses to TGF-β do not inhibit mesenchymal differentiation of mammary epithelial cells. In contrast, we show that TGF-β rapidly activates RhoA in epithelial cells, and that blocking RhoA or its downstream target p160^ROCK, by the expression of dominant-negative mutants, inhibited TGF-β–mediated EMT. The data suggest that TGF-β rapidly activates RhoA-dependent signaling pathways to induce stress fiber formation and mesenchymal characteristics.