FoxO Forkhead transcription factors are shown here to act as signal transducers at the confluence of Smad, PI3K, and FoxG1 pathways. Smad proteins activated by TGF-β form a complex with FoxO proteins to turn on the growth inhibitory gene p21Cip1. This process is negatively controlled by the PI3K pathway, a known inhibitor of FoxO localization in the nucleus, and by the telencephalic development factor FoxG1, which we show binds to FoxO-Smad complexes and blocks p21Cip1 expression. We suggest that the activity of this network confers resistance to TGF-β-mediated cytostasis during the development of the telencephalic neuroepithelium and in glioblastoma brain tumor cells.