Resistance to growth inhibitory effects of transforming growth factor (TGF)-beta is a frequent consequence of malignant transformation. On the other hand, serum concentrations of TGF-beta, plasminogen activator inhibitor type 1 (PAI-1), and vascular endothelial growth factor (VEGF) are elevated as tumor progresses. The molecular mechanism of autocrine TGF-beta signaling and its effects on PAI-1 and VEGF production in human hepatocellular carcinoma (HCC) is unknown. TGF-beta signaling involves TGF-beta type I receptor-mediated phosphorylation of serine residues within the conserved SSXS motif at the C-terminus of Smad2 and Smad3. To investigate the involvement of autocrine TGF-beta signal in cell growth, PAI-1 and VEGF production of HCC, we made stable transfectants of human HCC line (HuH-7 cells) to express a mutant Smad2(3S-A), in which serine residues of SSXS motif were changed to alanine. The transfectants demonstrated an impaired Smad2 signaling. Along with the resistance to growth inhibition by TGF-beta, forced expression of Smad2(3S-A) induced endogenous TGF-beta secretion. Moreover, this increased TGF-beta enhanced ligand-dependent signaling through the activated Smad3 and Smad4 complex, and transcriptional activities of PAI-1 and VEGF genes. In conclusion, distortion of autocrine TGF-beta signals in human HCC accelerates their malignant potential by enhancing cell growth as well as PAI-1 and VEGF production.