Examination of Müllerian inhibiting substance (MIS) signaling in the rat in vivo and in vitro revealed novel developmental stage- and tissue-specific events that contributed to a window of MIS responsiveness in Müllerian duct regression. The MIS type II receptor (MISRII)-expressing cells are initially present in the coelomic epithelium of both male and female urogenital ridges, and then migrate into the mesenchyme surrounding the male Müllerian duct under the influence of MIS. Expression of the genes encoding MIS type I receptors, Alk2 and Alk3, is also spatiotemporally controlled; Alk2 expression appears earlier and increases predominantly in the coelomic epithelium, whereas Alk3 expression appears later and is restricted to the mesenchyme, suggesting sequential roles in Müllerian duct regression. MIS induces expression of Alk2, Alk3 and Smad8, but downregulates Smad5 in the urogenital ridge. Alk2-specific small interfering RNA (siRNA) blocks both the transition of MISRII expression from the coelomic epithelium to the mesenchyme and Müllerian duct regression in organ culture. Müllerian duct regression can also be inhibited or accelerated by siRNA targeting Smad8 and Smad5, respectively. Thus, the early action of MIS is to initiate an epithelial-to-mesenchymal transition of MISRII-expressing cells and to specify the components of the receptor/SMAD signaling pathway by differentially regulating their expression.