Activin A is a potent growth and differentiation factor whose synthesis and bioactivity are tightly regulated. Both follistatin binding and inhibin subunit heterodimerization block access to the activin receptor and/or receptor activation. We postulated that the activin-beta(C) subunit provides another mechanism regulating activin bioactivity. To test our hypothesis, we examined the biological effects of activin C and produced mice that overexpress activin-beta(C). Activin C reduced activin A bioactivity in vitro; in LNCaP cells, activin C abrogated both activin A-induced Smad signaling and growth inhibition, and in LbetaT2 cells, activin C antagonized activin A-mediated activity of an follicle-stimulating hormone-beta promoter. Transgenic mice that overexpress activin-betaC exhibited disease in testis, liver, and prostate. Male infertility was caused by both reduced sperm production and impaired sperm motility. The livers of the transgenic mice were enlarged because of an imbalance between hepatocyte proliferation and apoptosis. Transgenic prostates showed evidence of hypertrophy and epithelial cell hyperplasia. Additionally, there was decreased evidence of nuclear Smad-2 localization in the testis, liver, and prostate, indicating that overexpression of activin-beta(C) antagonized Smad signaling in vivo. Underlying the significance of these findings, human testis, liver, and prostate cancers expressed increased activin-betaC immunoreactivity. This study provides evidence that activin-beta(C) is an antagonist of activin A and supplies an impetus to examine its role in development and disease.