Upregulation of HER2/ErbB2/Neu occurs in 15-30% of human breast cancers and correlates with poor prognosis. Identification of ErbB2/Neu transcriptional targets should facilitate development of novel therapeutic approaches. Development of breast cancer is a multistep process; thus, to identify the transcriptomes associated with different stages of progression of tumorigenesis, we compared expression profiles of mammary tumors and preneoplastic mammary tissue from MMTV-Neu transgenic mice to expression profiles of wild-type mammary glands using Affymetrix microarrays. We identified 324 candidate genes that were unique to ErbB2/Neu-induced tumors relative to normal mammary gland tissue from wild-type controls. Expression of a subset of these genes (82) was also changed in the preneoplastic mammary glands compared to wild-type controls, indicating that they may play a pivotal role during early events of ErbB2/Neu-initiated mammary tumorigenesis. Further analysis of the microarray data revealed that expression of several known transforming growth factor (TGF)-beta target genes was altered, suggesting that the TGF-beta signaling cascade is downregulated in ErbB2/Neu-induced tumors. Western blot analysis for TGF-beta-Receptor-I/ALK5 and immunohistochemistry for TGF-beta-Receptor-I/ALK5 and phosphorylated/activated Smad2 confirmed that the Smad-dependent TGF-beta signaling cascade was inactive in these tumors. Although absent in most of the tumor, phosphorylated Smad2 was present in the periphery of tumors. Interestingly, presence of phosphorylated/activated Smad2 correlated with expression of Activin-Receptor-IB/ALK4, suggesting that although Smad-dependent TGF-beta signaling is absent in ErbB2/Neu-induced tumors, Activin signaling may be active at the leading edge of these tumors. Cumulatively, these data indicate that the TGF-beta pathway is intrinsically suppressed in ErbB2/Neu tumors via a mechanism involving loss of TGF-beta-Receptor-I/ALK5.