The ocular surface epithelia, including the stratified but non-keratinized corneal, limbal and conjunctival epithelium, in concert with the epidermal keratinized eyelid epithelium, function together to maintain eye health and vision. Abnormalities in cellular proliferation or differentiation in any of these surface epithelia are central in the pathogenesis of many ocular surface disorders. Goblet cells are important secretory cell components of various epithelia, including the conjunctiva; however, mechanisms that regulate goblet cell differentiation in the conjunctiva are not well understood. Herein, we report that conditional deletion of transforming growth factor β receptor II (Tgfbr2) in keratin 14-positive stratified epithelia causes ocular surface epithelial hyperplasia and conjunctival goblet cell expansion that invaginates into the subconjunctival stroma in the mouse eye. We found that, in the absence of an external phenotype, the ocular surface epithelium develops properly, but young mice displayed conjunctival goblet cell expansion, demonstrating that TGFβ signaling is required for normal restriction of goblet cells within the conjunctiva. We observed increased expression of SAM-pointed domain containing ETS transcription factor (SPDEF) in stratified conjunctival epithelial cells in Tgfbr2 cKO mice, suggesting that TGFβ restricted goblet cell differentiation directly by repressing Spdef transcription. Gain of function of Spdef in keratin 14-positive epithelia resulted in the ectopic formation of goblet cells in the eyelid and peripheral cornea in adult mice. We found that Smad3 bound two distinct sites on the Spdef promoter and that treatment of keratin 14-positive cells with TGFβ inhibited SPDEF activation, thereby identifying a novel mechanistic role for TGFβ in regulating goblet cell differentiation.