Mutations of SMAD4/DPC4 are found in about 60% of human invasive pancreatic ductal adenocarcinomas (PDACs); yet, the manner in which SMAD4 deficiency enhances tumorigenesis remains elusive. Using a Cre-LoxP approach, we generated a mutant mouse carrying a targeted deletion of Smad4 in the pancreas. We showed that the absence of Smad4 alone did not trigger pancreas tumor formation; however, it increased the expression of an inactivated form of Pten, suggesting a role of Pten in preventing Smad4-/- cells from undergoing malignancy. To investigate this, we disrupted both Pten and Smad4. We showed that Pten deficiency initiated widespread premalignant lesions, and a low tumor incidence that was significantly accelerated by Smad4-deficiency. The absence of Smad4 in a Pten-mutant background enhanced cell proliferation and triggered transdifferentiation from acinar, centroacinar and islet cells, accompanied by activation of Notch1 signaling. We showed that all tumors developed in the Smad4/Pten-mutant pancreas exhibited high levels of pAKT and mTOR, and that about 50 and 83% of human pancreatic cancers examined showed increased pAKT and pmTOR, respectively. Besides the similarity in gene expression, the pAKT and/or pmTOR-positive human PDACs and mouse pancreatic tumors also shared some histopathological similarities. These observations indicate that Smad4/Pten-mutant mice mimic the tumor progression of human pancreatic cancers that are driven by activation of the AKT-mTOR pathway, and uncovered a synergistic action of Smad4 and Pten in repressing pancreatic tumorigenesis.