Smad3, a major intracellular mediator of TGFβ signaling, functions as both a positive and negative regulator in carcinogenesis. In response to TGFβ, the TGFβ receptor phosphorylates serine residues at the Smad3 C-tail. Cancer cells often contain high levels of the MAPK and CDK activities, which can lead to the Smad3 linker region becoming highly phosphorylated. Here, we report, for the first time, that mutation of the Smad3 linker phosphorylation sites markedly inhibited primary tumor growth, but significantly increased lung metastasis of breast cancer cell lines. In contrast, mutation of the Smad3 C-tail phosphorylation sites had the opposite effect. We show that mutation of the Smad3 linker phosphorylation sites greatly intensifies all TGFβ-induced responses, including growth arrest, apoptosis, reduction in the size of putative cancer stem cell population, epithelial-mesenchymal transition, and invasive activity. Moreover, all TGFβ responses were completely lost on mutation of the Smad3 C-tail phosphorylation sites. Our results demonstrate a critical role of the counterbalance between the Smad3 C-tail and linker phosphorylation in tumorigenesis and metastasis. Our findings have important implications for therapeutic intervention of breast cancer.