Transforming growth factor beta (TGF-beta) modulates a number of cellular phenotypes as divergent as growth stimulation and growth inhibition. Although the Smad pathway is critical for many of these responses, recent evidence indicates that Smad-independent pathways may also have a critical role. One such protein previously shown to regulate TGF-beta action independent of the Smad proteins is the c-Abl nonreceptor tyrosine kinase. In the current study we determined that TGF-beta receptor signaling activates c-Abl kinase activity in a subset of fibroblast but not epithelial cultures. This cell type-specific response occurs in a membrane-proximal locale independent of receptor internalization and upstream of dynamin action. Although c-Abl activation by TGF-beta is independent of Smad2 or Smad3, it is prevented by inhibitors of phosphatidylinositol 3-kinase or PAK2. Thus, c-Abl represents a target downstream of phosphatidylinositol 3-kinase-activated PAK2, which differentiates TGF-beta signaling in fibroblasts and epithelial cell lines and integrates serine/threonine receptor kinases with tyrosine kinase pathways.