The SMAD4 (Dpc4) gene plays a key role in the TGF-beta signaling pathway. We recently inactivated the mouse homolog Smad4. The homozygous mutants were embryonic lethals, whereas the heterozygotes were viable and fertile. Although young heterozygotes were normal, old mice developed gastric and duodenal polyps similar to those found in human juvenile polyps characterized by abundant stroma and eosinophilic infiltrations. These data are consistent with the reports that a subset of human juvenile polyposis kindreds carry germline mutations in the SMAD4 gene. We then introduced the Smad4 mutation into the Apc delta 716 knockout mice, a model for human familial adenomatous polyposis. Because both Apc and Smad4 are located on mouse chromosome 18, we constructed by meiotic recombination, compound heterozygotes carrying both mutations on the same chromosome. In such mice, intestinal polyps developed into more malignant tumors than those in the simple Apc delta 716 heterozygotes, showing an extensive stromal cell proliferation and strong submucosal invasion. These results indicate that mutations in SMAD4 play a significant role in the malignant progression of colorectal tumors.