Understanding how metastatic cancer cells co-opt bone microenvironment to establish as bone metastases is essential for the identification of new therapies to control bone metastasis. TGF-beta, released as the osteolysis in the bone metastatic lesion has been shown to promote tumor growth in the bone microenvironment. In the present study, we examined the crosstalk signaling among TGF-beta, ERK, PTEN and AKT in the bone microenvironment. Murine mammary tumor cell lines were transplanted in two different sites, on the cranial bone and subcutaneous lesions, and the effect of TGF-beta receptor1 kinase inhibitor (R1-KI) on tumor growth in the bone microenvironment was compared with that in the subcutaneous microenvironment. R1-KI treatment significantly suppressed tumor growth and cell proliferation in the bone but not in the subcutaneous microenvironment. This treatment also suppressed phosphorylated Smad2 in tumor cell in the bone but not in the subcutaneous microenvironment. Our data demonstrate that R1-KI treatment decreased the expression of phosphorylated ERK in the tumor cells and increased PTEN expression in the stromal cells in the bone microenvironment.