Tuberin (TSC2) is a tumor suppressor gene. At the cellular level, tuberin is required as a critical regulator of cell growth, neuronal differentiation, and tumor suppression. Here we report a critical role for tuberin in late stage myeloid cell differentiation. Tuberin strongly augments transforming growth factor (TGF)-beta1 signal transduction pathways, including SMAD activation. We also demonstrate that the amino-terminal region of tuberin interacts specifically with the MH2 domain of SMAD2 and SMAD3 proteins to regulate TGF-beta1-responsive genes such as p21(CIP). Inhibition of tuberin expression by Tsc2 antisense greatly reduces the ability of TGF-beta to transcriptionally regulate p21(CIP), p27(KIP), and cyclin A leading to an abrogation of the antiproliferative effects of TGF-beta1. Also, inhibition of tuberin expression during stimulation of monocytic differentiation with vitamin D(3) and TGF-beta1 significantly impaired myeloid cell growth inhibition and differentiation. Together, the data demonstrate the presence of a novel activation process following TGF-beta1 stimulation that requires tuberin-dependent activity.