Hepatocellular carcinoma (HCC) results from the accumulation of deregulated tumor suppressor genes and/or oncogenes in hepatocytes. Inactivation of TP53 and inhibition of transforming growth factor-beta (TGF-b) signaling are among the most common molecular events in human liver cancers. Thus, we assessed whether inactivation of TGF-b signaling, by deletion of the TGF-b receptor, type II (Tgfbr2), cooperates with Trp53 loss to drive HCC formation. Albumin-cre transgenic mice were crossed with floxed Trp53 and/or floxed Tgfbr2 mice to generate mice lacking p53 and/or Tgfbr2 in the liver. Deletion of Trp53 alone (Trp53 KO ) resulted in liver tumors in approximately 41% of mice by 10 months of age, whereas inactivation of Tgfbr2 alone (Tgfbr2 KO ) did not induce liver tumors. Surprisingly, deletion of Tgfbr2 in the setting of p53 loss (Trp53 KO ;Tgfbr2 KO ) decreased the frequency of mice with liver tumors to around 17% and delayed the age of tumor onset. Interestingly, Trp53 KO and Trp53 KO ;Tgfbr2 KO mice develop both HCC and cholangiocarcinomas, suggesting that loss of p53, independent of TGF-b, may affect liver tumor formation through effects on a common liver stem cell population. Assessment of potential mechanisms through which TGF-b signaling may promote liver tumor formation in the setting of p53 loss revealed a subset of Trp53 KO tumors that express increased levels of alpha-fetoprotein. Furthermore, tumors from Trp53 KO mice express increased TGF-b1 levels compared with tumors from Trp53 KO ;Tgfbr2 KO mice. Increased phosphorylated Smad3 and ERK1/2 expression was also detected in the tumors from Trp53 KO mice and correlated with increased expression of the TGF-b responsive genes, Pai1 and Ctgf. Conclusion: TGF-b signaling paradoxically promotes the formation of liver tumors that arise in the setting of p53 inactivation. (HEPATOLOGY 2012;55:121-131