Dysregulated transforming growth factor beta (TGF-β) signaling is associated with a spectrum of osseous defects as seen in Loeys-Dietz syndrome, Marfan syndrome, and Camurati-Engelmann disease. Intriguingly, neurofibromatosis type 1 (NF1) patients exhibit many of these characteristic skeletal features, including kyphoscoliosis, osteoporosis, tibial dysplasia, and pseudarthrosis; however, the molecular mechanisms mediating these phenotypes remain unclear. Here, we provide genetic and pharmacologic evidence that hyperactive TGF-β1 signaling pivotally underpins osseous defects in Nf1flox/−;Col2.3Cre mice, a model which closely recapitulates the skeletal abnormalities found in the human disease. Compared to controls, we show that serum TGF-β1 levels are fivefold to sixfold increased both in Nf1flox/−;Col2.3Cre mice and in a cohort of NF1 patients. Nf1-deficient osteoblasts, the principal source of TGF-β1 in bone, overexpress TGF-β1 in a gene dosage–dependent fashion. Moreover, Nf1-deficient osteoblasts and osteoclasts are hyperresponsive to TGF-β1 stimulation, potentiating osteoclast bone resorptive activity while inhibiting osteoblast differentiation. These cellular phenotypes are further accompanied by p21-Ras–dependent hyperactivation of the canonical TGF-β1–Smad pathway. Reexpression of the human, full-length neurofibromin guanosine triphosphatase (GTPase)-activating protein (GAP)-related domain (NF1 GRD) in primary Nf1-deficient osteoblast progenitors, attenuated TGF-β1 expression levels and reduced Smad phosphorylation in response to TGF-β1 stimulation. As an in vivo proof of principle, we demonstrate that administration of the TGF-β receptor 1 (TβRI) kinase inhibitor, SD-208, can rescue bone mass deficits and prevent tibial fracture nonunion in Nf1flox/−;Col2.3Cre mice. In sum, these data demonstrate a pivotal role for hyperactive TGF-β1 signaling in the pathogenesis of NF1-associated osteoporosis and pseudarthrosis, thus implicating the TGF-β signaling pathway as a potential therapeutic target in the treatment of NF1 osseous defects that are refractory to current therapies. © 2013 American Society for Bone and Mineral Research.