The TGF-β signaling pathway plays a significant role in various biological phenomena such as cell growth, embryogenesis, differentiation, morphogenesis and apoptosis. Gastrointestinal endodermal stem cells, influenced by TGF- β signals, undergo asymmetric cell division that leads to differentiation into tissue-specific functional cells such as hepatocytes and gut epithelial cells. Disruption of this process results in tissue-specific cancer development. This review illustrates the role of TGF-β signaling in normal and cancer stem cells. Through mouse studies targeting different members of this pathway, investigators will be able to better define mechanisms of malignant progression in order to develop and improve cancer therapeutics.