TGF-β can signal by means of Smad transcription factors, which are quintessential tumor suppressors that inhibit cell proliferation, and by means of Smad-independent mechanisms, which have been implicated in tumor progression. Although Smad mutations disable this tumor-suppressive pathway in certain cancers, breast cancer cells frequently evade the cytostatic action of TGF-β while retaining Smad function. Through immunohistochemical analysis of human breast cancer bone metastases and functional imaging of the Smad pathway in a mouse xenograft model, we provide evidence for active Smad signaling in human and mouse bone-metastatic lesions. Genetic depletion experiments further demonstrate that Smad4 contributes to the formation of osteolytic bone metastases and is essential for the induction of IL-11, a gene implicated in bone metastasis in this mouse model system. Activator protein-1 is a key participant in Smad-dependent transcriptional activation of IL-11 and its overexpression in bone-metastatic cells. Our findings provide functional evidence for a switch of the Smad pathway, from tumor-suppressor to prometastatic, in the development of breast cancer bone metastasis.