In the normal liver, the transforming growth factor beta (TGF-beta) signaling pathway plays an important role in inhibiting hepatocyte growth. This effect is mediated through Smad4 (or Dpc4), a tumor-suppressor gene that affects gene transcription and controls cell growth. A loss of Smad4 is associated with carcinoma in a number of other organs, including the pancreas and colon. Despite these facts, several recent studies using cDNA microarrays have surprisingly shown overexpression of Smad4 in hepatocellular carcinoma (HCC). Because Smad4 plays a central role in the TGF-beta signaling pathway, we hypothesized that activation of the TGF-beta signaling pathway may explain Smad4 overexpression. To investigate this, 21 surgically resected HCCs were immunostained with antibodies to Smad4 and TGF-beta receptor II. Tumor and normal liver tissues were stained in all cases, and expression in the tumor was scored in comparison to the nonneoplastic liver. Thirteen hepatic adenomas were also immunostained as a control group. The average age at resection was 58 +/- 16 years for the 17 men and 4 women with HCC. TGF-beta receptor II was weakly expressed in the hepatocyte cytoplasm of all normal livers and was overexpressed in 10 of 21 HCCs. Of these 10 HCCs increased Smad4 immunolabeling was also present in 10 of 10 cases. In contrast, of the 11 of HCCs that did not show TGF-beta overexpression, only 1 showed increased Smad4 immunolabeling. Increased TGF-beta receptor II and Smad4 labeling was associated with a worse nuclear grade and increased mitotic activity. For the hepatic adenomas, the 13 women had an average age at resection of 36 +/- 10 years. Whereas 2 adenomas showed over expression of TGF-beta receptor II, there was no Smad4 overexpression in any case. In conclusion, increased Smad4 protein expression in HCC is tightly linked to overexpression of TGF-beta II receptors and is associated with increased mitoses and a worse nuclear grade. Hepatic adenomas only rarely show overexpression of TGF-beta II receptors and did not show increased Smad4 labeling. The results from this study indicate that Smad4 protein overexpression is present in a subset of HCCs and is strongly correlated with immunostaining for TGF-beta II receptor, findings that may represent activation or dysregulation of the TGF-beta signaling pathway.