Recent data indicate that transforming growth factor-β1 (TGF-β1) can act to promote tumour progression in the late stages of carcinogenesis. The mechanism by which this occurs is unknown although a ligand-induced epithelial–mesenchymal transition (EMT) is thought to be important. In this study, we demonstrate that active Ras is required for TGF-β1-induced EMT in human keratinocytes and that epidermal growth factor (EGF) can substitute for mutant Ras. EMT was reversed by the removal of TGF-β1. Under conditions of TGF-β1-induced EMT, cells were growth inhibited by the ligand resulting in G1 arrest. In cells containing normal Ras, TGF-β1-activated ERK and p38 mitogen-activated protein kinases (MAPKs), and levels of activation were further increased by co-treatment with EGF. Inhibition of MAPK pathways and Smad2/3 signalling blocked the induction of EMT by TGF-β1. Further, inhibition of the AP-1 transcriptional complex by -Gingerol, or by the ectopic expression of JDP2, blocked TGF-β1-induced EMT and conversely, stimulation of AP-1 by 12-O-tetradecanoylphorbol 13-acetate (TPA) substituted for EGF in the induction of EMT by TGF-β1 in cells containing normal Ras. The presence of oncogenic Ras, the treatment of cells with EGF, or the treatment of cells with TPA to activate AP-1, potentiated TGF-β1-induced Smad-dependent transcription, an effect that was attenuated by the inhibition of MAPKs and AP-1. The results demonstrate that active Ras and TGF-β1 co-operate to reversibly induce EMT in human keratinocytes by mechanisms that involve MAPKs, Smad2/3 and AP-1. Further we demonstrate that MAPK/AP-1 signalling enhances Smad transcriptional activity under conditions associated with TGF-β1-induced EMT. © 2005 Wiley-Liss, Inc.