The TGF-β/Smad and the PI3K/AKT signaling pathways are important regulators of proliferation and apoptosis, and their alterations lead to cancer development. TGF-β acts as a tumor suppressor in premalignant cells, but it is a tumor promoter for cancerous cells. Such dichotomous actions are dictated by different cellular contexts. Here, we have unveiled a PTEN-Smad3 regulatory loop that provides a new insight in the complex cross talk between TGF-β/Smad and PI3K/AKT signaling pathways. We demonstrate that TGF-β triggers apoptosis of wild-type polarized endometrial epithelial cells by a Smad3-dependent activation of PTEN transcription, which results in the inhibition of PI3K/AKT signaling pathway. We show that specific Smad3 knockdown or knockout reduces basal and TGF-β-induced PTEN expression in endometrial cells, resulting in a blockade of TGF-β-induced apoptosis and an enhancement of cell proliferation. Likewise Smad3 deletion, PTEN knockout prevents TGF-β-induced apoptosis and increases cell proliferation by increasing PI3K/AKT/mTOR signaling. In summary, our results demonstrate that Smad3-PTEN signaling axis determine cellular responses to TGF-β.