Transforming growth factor beta (TGF-beta) initiates multiple signal pathways and activates many downstream kinases. Here, we determined that TGF-beta1 bound cell surface hyaluronidase Hyal-2 on microvilli in type II TGF-beta receptor-deficient HCT116 cells, as determined by immunoelectron microscopy. This binding resulted in recruitment of proapoptotic WOX1 (also named WWOX or FOR) and formation of Hyal-2.WOX1 complexes for relocation to the nuclei. TGF-beta1 strengthened the binding of the catalytic domain of Hyal-2 with the N-terminal Tyr-33-phosphorylated WW domain of WOX1, as determined by time lapse fluorescence resonance energy transfer analysis in live cells, co-immunoprecipitation, and yeast two-hybrid domain/domain mapping. In promoter activation assay, ectopic WOX1 or Hyal-2 alone increased the promoter activity driven by Smad. In combination, WOX1 and Hyal-2 dramatically enhanced the promoter activation (8-9-fold increases), which subsequently led to cell death (>95% of promoter-activated cells). TGF-beta1 supports L929 fibroblast growth. In contrast, transiently overexpressed WOX1 and Hyal-2 sensitized L929 to TGF-beta1-induced apoptosis. Together, TGF-beta1 invokes a novel signaling by engaging cell surface Hyal-2 and recruiting WOX1 for regulating the activation of Smad-driven promoter, thereby controlling cell growth and death.