The accumulation of genetic and epigenetic alterations mediates colorectal cancer (CRC) formation by deregulating key signaling pathways in cancer cells. In CRC, one of the most commonly inactivated signaling pathways is the transforming growth factor-beta (TGF-β) signaling pathway, which is often inactivated by mutations of TGF-β type II receptor (TGFBR2). Another commonly deregulated pathway in CRC is the phosphoinositide-3-kinase (PI3K)-AKT pathway. Phosphatase and tensin homolog deleted on chromosome 10 (PTEN) is an important negative regulator of PI3K-AKT signaling and is silenced in ∼30% of CRC. The combination of TGFBR2 inactivation and loss of PTEN is particularly common in microsatellite-unstable CRCs. Consequently, we determined in vivo if deregulation of these two pathways cooperates to affect CRC formation by analyzing tumors arising in mice that lack Tgfbr2 and/or Pten specifically in the intestinal epithelium. We found that lack of Tgfbr2 (Tgfbr2(IEKO)) alone is not sufficient for intestinal tumor formation and lack of Pten (Pten(IEKO)) alone had a weak effect on intestinal tumor induction. However, the combination of Tgfbr2 inactivation with Pten loss (Pten(IEKO);Tgfbr2(IEKO)) led to malignant tumors in both the small intestine and colon in 86% of the mice and to metastases in 8% of the tumor-bearing mice. Moreover, these tumors arose via a β-catenin-independent mechanism. Inactivation of TGF-β signaling and loss of Pten in the tumors led to increased cell proliferation, decreased apoptosis and decreased expression of cyclin-dependent kinase inhibitors. Thus, inactivation of TGF-β signaling and loss of PTEN cooperate to drive intestinal cancer formation and progression by suppressing cell cycle inhibitors.