Although it is well established that mammary tumorigenesis converts transforming growth factor-β (TGF-β) from a tumor suppressor to a tumor promoter, the molecular, cellular and microenvironmental mechanisms underlying the dichotomous nature of TGF-β in mammary epithelial cells (MECs) remains to be determined definitively. Aberrant upregulation of the inducible cyclooxygenase, Cox-2, occurs frequently in breast cancers and is associated with increasing disease severity and the acquisition of metastasis; however, the impact of Cox-2 expression on normal and malignant MEC response to TGF-β remains unknown. We show here that TGF-β induced Cox-2 expression in normal MECs during their acquisition of an epithelial–mesenchymal transition (EMT) phenotype. Moreover, stable Cox-2 expression in normal MECs stimulated their invasion, EMT and anchorage-independent growth and inhibited their activation of Smad2/3 by TGF-β. Conversely, antagonizing TGF-β signaling in malignant, metastatic MECs significantly reduced their expression of Cox-2 as well as enhanced their activation of Smad2/3 by TGF-β. Along these lines, elevated Cox-2 expression elicited prostaglandin E ₂ (PGE ₂ ) production and the autocrine activation of EP receptors, which antagonized Smad2/3 signaling in normal and malignant MECs. Importantly, rendering normal and malignant MECs Cox-2 deficient inhibited their production of PGE ₂ and acquisition of an EMT morphology as well as potentiated their nuclear accumulation of Smad2/3 and transcription of plasminogen activator inhibitor-1 and p15 messenger RNA. Collectively, our findings establish Cox-2 as a novel antagonist of Smad2/3 signaling in normal and malignant MECs; they also suggest that chemotherapeutic targeting of Cox-2 may offer new inroads in restoring the tumor-suppressing activities of TGF-β in malignant, metastatic breast cancers.