Transforming growth factor β (TGF-β) signaling regulates a wide range of cellular and physiologic processes including proliferation, cell survival, differentiation, migration, angiogenesis, and immune surveillance. It is therefore not surprising that this ligand plays a significant role in the development and progression of cancer. The current consensus is that TGF-β affects tumor pathogenesis both positively and negatively, functioning as a tumor suppressor in the premalignant stages of tumorigenesis and apparently as a tumor promoter in later stages of cancer leading to metastasis. Despite the prominent roles of TGF-β in both normal and cancerous cellular processes, the detailed mechanisms of how TGF-β induces such diverse and sometimes contradictory responses remain poorly understood. To help understand TGF-β signaling quantitatively, we have developed a dynamic mathematical model of the canonical TGF-β pathway via Smad transcription factors, the major intracellular mediators of the signaling cascades, based on reported experimental observations in literature. By describing how an extracellular signal of the TGF-β ligand is sensed by receptors and transmitted into the nucleus through intracellular Smad proteins, the model yields quantitative insight into how TGF-β-induced responses can be modulated and regulated. Considering that Smad nuclear accumulation is necessary for transcriptional regulation, our model analysis reveals that mechanisms associated with Smad activation by ligand-activated receptor, nuclear complex formation between Smad proteins, and inactivation of ligand-activated Smad (e.g. degradation, dephosphorylation) may be critical for regulating TGF-β-targeted functional responses by affecting the intensity and duration of nuclear retention of Smad proteins. The model also predicts possible dynamic behavior of the Smad-mediated pathway in abnormal cells, and provides clues regarding possible mechanisms for explaining the seemingly contradictory roles of TGF-β during cancer progression. Based on the reported observations that TGF-β receptors are abnormally altered in a variety of human cancers, simulations of cancerous signaling using our model indicate that reduction in the levels of functional receptors may lead to altered TGF-β signaling behavior where tumor suppression characteristics are lost as a result of attenuated and transient Smad nuclear accumulation. Considering the differences in the dynamics of transcriptionally active Smad in the nucleus between the normal and cancerous signaling systems, the TGF-β paradox may be partially explained by a hypothesis that signaling thresholds of anti-oncogenic responses are different from those of pro-oncogenic responses.