The SKI protein represses the TGF-beta tumor suppressor pathway by associating with the Smad transcription factors. SKI is upregulated in human malignant melanoma tumors in a disease-progression manner and its overexpression promotes proliferation and migration of melanoma cells in vitro. The mechanisms by which SKI antagonizes TGF-beta signaling in vivo have not been fully elucidated. Here we show that human melanoma cells in which endogenous SKI expression was knocked down by RNAi produced minimal orthotopic tumor xenograft nodules that displayed low mitotic rate and prominent apoptosis. These minute tumors exhibited critical signatures of active TGF-beta signaling including high levels of nuclear Smad3 and p21(Waf-1), which are not found in the parental melanomas. To understand how SKI promotes tumor growth we used gain- and loss-of-function approaches and found that simultaneously to blocking the TGF-beta-growth inhibitory pathway, SKI promotes the switch of Smad3 from tumor suppression to oncogenesis by favoring phosphorylations of the Smad3 linker region in melanoma cells but not in normal human melanocytes. In this context, SKI is required for preventing TGF-beta-mediated downregulation of the oncogenic protein c-MYC, and for inducing the plasminogen activator inhibitor-1, a mediator of tumor growth and angiogenesis. Together, the results indicate that SKI exploits multiple regulatory levels of the TGF-beta pathway and its deficiency restores TGF-beta tumor suppressor and apoptotic activities in spite of the likely presence of oncogenic mutations in melanoma tumors.