Insulin-like growth factor-I (IGF-I) and transforming growth factor-beta (TGF-beta) have been shown to be oncogenic and tumor suppressive, respectively, on prostate epithelial cells. Here we show that IGF-I inhibits the ability of TGF-beta to regulate expression of several genes in the non-tumorigenic rat prostatic epithelial line, NRP-152. In these cells, IGF-I also inhibits TGF-beta-induced transcriptional responses, as shown by several promoter reporter constructs, suggesting that IGF-I intercepts an early step in TGF-beta signaling. We show that IGF-I does not down-regulate TGF-beta receptor levels, as determined by both receptor cross-linking and Western blot analyses. However, Western blot analysis reveals that IGF-I selectively inhibits the TGF-beta-triggered activation Smad3 but not Smad2, while not altering expression of total Smads 2, 3, or 4. The phosphatidylinositol 3-kinase (PI3K) inhibitor, LY29004 reverses the ability of IGF-I to inhibit TGF-beta-induced transcriptional responses and the activation of Smad3, suggesting that the suppression of TGF-beta signaling by IGF-I is mediated through activation of PI3K. Moreover, we show that enforced expression of dominant-negative PI3K (DN-p85alpha) or phosphatidylinositol 3-phosphate-phosphatase, PTEN, also reverse the suppressive effect of IGF-I on TGF-beta-induced 3TP-luciferase reporter activity, whereas constitutively active PI3K (p110alphaCAAX) completely blocks TGF-beta-induced 3TP-luciferase reporter activity. Further transfection experiments including expression of constitutively active and dominant-negative Akt and rapamycin treatment suggest that suppression of TGF-beta signaling/Smad3 activation by IGF-I occurs downstream of Akt and through mammalian target of rapamycin activation. In summary, our data suggest that IGF-I inhibits TGF-beta transcriptional responses through selective suppression of Smad3 activation via a PI3K/Akt-dependent pathway.