5-Fluorouracil (5-FU), a cell cycle-specific antimetabolite, is one of the most commonly used chemotherapeutic agents for colorectal cancer (CRC). Yet, resistance to 5-FU-based chemotherapy is still an obstacle to the treatment of this malignancy. Mutation or loss of Smad4 in CRC is pivotal for chemoresistance. However, the mechanism by which Smad4 regulates the chemosensitivity of CRC remains unclear. In the present study, we investigated the role of Smad4 in the chemosensitivity of CRC to 5-FU, and whether Smad4-regulated cell cycle arrest is involved in 5-FU chemoresistance. We used Smad4-expressing CT26 and Smad4-null SW620 cell lines as experimental models, by knockdown or transgenic overexpression. Cells or tumors were treated with 5-FU to determine chemosensitivity by cell growth, tumorigenicity assay and a mouse model. Cell cycle distribution was examined with flow cytometric analysis, and cell cycle-related proteins were examined by western blotting. Smad4 deficiency in CT26 and SW620 cells induced chemoresistance to 5-FU both in vitro and in vivo. Smad4 deficiency attenuated G1 or G2 cell cycle arrest by activating the PI3K/Akt/CDC2/survivin pathway. The PI3K inhibitor, LY294002, reversed the activation of the Akt/CDC2/survivin cascade in the Smad4-deficient cells, while it had little effect on cells with high Smad4 expression. In conclusion, we discovered a novel mechanism mediated by Smad4 to trigger 5-FU chemosensitivity through cell cycle arrest by inhibiting the PI3K/Akt/CDC2/survivin cascade. The present study also implies that LY294002 has potential therapeutic value to reverse the chemosensitivity of CRC with low Smad4 expression.