Epithelial-mesenchymal transition (EMT) is a normal cell differentiation event during development and contributes pathologically to carcinoma and fibrosis progression. EMT often associates with increased transforming growth factor-β (TGF-β) signaling, and TGF-β drives EMT, in part through Smad-mediated reprogramming of gene expression. TGF-β also activates the Erk MAPK pathway through recruitment and Tyr phosphorylation of the adaptor protein ShcA by the activated TGF-β type I receptor. We found that ShcA protects the epithelial integrity of nontransformed cells against EMT by repressing TGF-β-induced, Smad-mediated gene expression. p52ShcA competed with Smad3 for TGF-β receptor binding, and down-regulation of ShcA expression enhanced autocrine TGF-β/Smad signaling and target gene expression, whereas increased p52ShcA expression resulted in decreased Smad3 binding to the TGF-β receptor, decreased Smad3 activation, and increased Erk MAPK and Akt signaling. Furthermore, p52ShcA sequestered TGF-β receptor complexes to caveolin-associated membrane compartments, and reducing ShcA expression enhanced the receptor localization in clathrin-associated membrane compartments that enable Smad activation. Consequently, silencing ShcA expression induced EMT, with increased cell migration, invasion, and dissemination, and increased stem cell generation and mammosphere formation, dependent upon autocrine TGF-β signaling. These findings position ShcA as a determinant of the epithelial phenotype by repressing TGF-β-induced Smad activation through differential partitioning of receptor complexes at the cell surface.