Transforming growth factor-beta (TGF-beta) signaling members, TGF-beta receptor type II (TBRII), Smad2, Smad4 and Smad adaptor, embryonic liver fodrin (ELF), are prominent tumor suppressors in gastrointestinal cancers. Here, we show that 40% of elf(+/-) mice spontaneously develop hepatocellular cancer (HCC) with markedly increased cyclin D1, cyclin-dependent kinase 4 (Cdk4), c-Myc and MDM2 expression. Reduced ELF but not TBRII, or Smad4 was observed in 8 of 9 human HCCs (P<0.017). ELF and TBRII are also markedly decreased in human HCC cell lines SNU-398 and SNU-475. Restoration of ELF and TBRII in SNU-398 cells markedly decreases cyclin D1 as well as hyperphosphorylated-retinoblastoma (hyperphosphorylated-pRb). Thus, we show that TGF-beta signaling and Smad adaptor ELF suppress human hepatocarcinogenesis, potentially through cyclin D1 deregulation. Loss of ELF could serve as a primary event in progression toward a fully transformed phenotype and could hold promise for new therapeutic approaches in human HCCs.