Transforming growth factor beta (TGF-b) signaling leads to a number of biological end points involving cell growth, differentiation, and morphogenesis. Typically, the cellular effect accompanies an induction of mesodermal cell fate and inhibition of neural cell differentiation. However, during pathological conditions, these defined effects of TGF-b can be reversed; for example, the growthinhibitory effect is replaced with its tumor promoting ability. A multitude of factors and cross-signaling pathways have been reported to be involved in modulating the dual effects of TGF-b. In this review, we focus on the potential role of TGF-b signal transduction during development of neural progenitor cells and its relation to glioblastoma development from neural stem cells.