Endoglin is a membrane glycoprotein that acts as a coreceptor for transforming growth factor-beta. We and others have previously suggested a function of endoglin as a tumor suppressor in epithelial cancer. Here, we study the expression of endoglin during chemical mouse skin carcinogenesis. We find that shedding of membrane endoglin, allowing the secretion of a soluble endoglin form, is a late event associated with progression from squamous to spindle cell carcinomas. Knockdown of endoglin in transformed keratinocytes activates the Smad2/3 signaling pathway resulting in cell growth arrest, delayed tumor latencies, and a squamous to spindle phenotypic conversion. Forced expression of the long endoglin isoform in spindle carcinoma cells blocks transforming growth factor-beta1 stimulation of Smad2/3 signaling and prevents tumor formation. In contrast, expression of the short endoglin isoform has no effect on spindle cell growth in vitro or in vivo. Our results show that endoglin behaves as a suppressor of malignancy during the late stages of carcinogenesis. Therefore, disruption of membrane endoglin emerges as a crucial event for progression to spindle cell carcinomas.