The actin cytoskeleton undergoes architectural changes during the processes of cell transformation and tumourigenesis. Transforming growth factors beta arrest cell cycle progression, regulate differentiation and modulate the onset of oncogenesis and tumourigenesis. Here, we investigated the direct role of transforming growth factor beta-1 in altering the transformed phenotype and regulating the actin organisation of oncogenic fibroblasts that constitutively or inducibly express the H-ras oncogene. Following transforming growth factor beta-1 treatment, these transformed fibroblasts undergo a dramatic morphological alteration that includes a discrete reorganisation of their actin cytoskeleton and focal adhesions. Quantitative biochemical analysis demonstrated that transforming growth factor beta-1 potently induced polymerisation of globular to filamentous actin, thus corroborating the morphological analysis. The effect of transforming growth factor beta-1 on the cytoskeleton correlates with the ability of this cytokine to suppress anchorage-independent growth of the transformed fibroblasts. Furthermore, transforming growth factor beta-1 upregulates considerably the levels of the RhoB small GTPase and less the RhoA levels. Finally, The beta GTPase inhibitor, C3 exotransferase, blocks the ability of TGF-beta1 to induce cytoskeletal reorganisation. These findings indicate that transforming growth factor beta can regulate cell morphology and growth in a concerted manner possibly via mechanisms that control the actin cytoskeleton.