The biological effect of transforming growth factor-ƒÒƒn(TGF-ƒÒƒw is cell-type specific and complex. The precise role of TGF-ƒÒƒnis not clear in vivo. To elucidate the regulation mechanism of endogenous TGF-ƒÒ on hepatoma progression, we modified MH129F mouse hepatoma cell with retroviral vector encoding extracellular region of type II TGF-ƒÒ receptor (TRII). Soluble TRII (TRIIs) blocked TGF-ƒÒ binding to TRII on membrane of hepatoma cells. Growth of MH129F cells was inhibited by TGF-ƒÒƒ¡ƒntreatment, however soluble TRII-overexpressing cells (MH129F/TRIIs) did not show any change in proliferation after TGF-ƒÒƒ¡ƒntreatment. MH129F/TRIIs cells also increased vascular endothelial growth factor (VEGF) expression, endothelial cell migration and tube formation. Implantation of MH129F/TRIIs cells into C3H/He mice showed the significantly enhanced tumor formation. According to western blot and protein kinase C (PKC) assay, expression of VEGF, KDR/flk-1 receptor and eNOS was enhanced, and phosphorylation activity of PKC was increased up to 3.7-fold in MH129F/TRIIs tumor. Finally PECAM-1-stained intratumoral vessel was shown to be 4.2-fold higher in MH129F/TRIIs tumor. These results indicate that VEGF expression is upregulated by a blockade of endogenous TGF-ƒÒƒnsignaling in TGF-ƒÒ-sensitive hepatoma cells, and then stimulates angiogenesis and tumorigenicity. Therefore, we suggest that endogenous TGF-ƒÒ is a major regulator of VEGF/flk-1-mediated angiogenesis pathway in hepatoma progression.