Pancreatic ductal adenocarcinoma (PDAC) is the fourth most common cause of cancer death in North America. Activating KRAS mutations and Smad4 loss occur in approximately 90% and 55% of PDAC, respectively. While their roles in the early stages of PDAC development have been confirmed in genetically modified mouse models, their roles in the multistep malignant transformation of human pancreatic duct cells have not been directly demonstrated. Here, we report that Smad4 represents a barrier in KRAS-mediated malignant transformation of the near normal immortalized human pancreatic duct epithelial (HPDE) cell line model. Marked Smad4 downregulation by shRNA in KRAS (G12V) expressing HPDE cells failed to cause tumorigenic transformation. However, KRAS-mediated malignant transformation occurred in a new HPDE-TGF-β resistant (TβR) cell line that completely lacks Smad4 protein expression and is resistant to the mito-inhibitory activity of TGF-β. This transformation resulted in tumor formation and development of metastatic phenotype when the cells were implanted orthotopically into the mouse pancreas. Smad4 restoration re-established TGF-β sensitivity, markedly increased tumor latency by promoting apoptosis, and decreased metastatic potential. These results directly establish the critical combination of the KRAS oncogene and complete Smad4 inactivation in the multi-stage malignant transformation and metastatic progression of normal human HPDE cells.