Purpose. An early hallmark of preclinical diabetic retinopathy is thickening of the capillary basal lamina (BL). TGF-beta, a multipotent cytokine acting through its receptors ALK5 and -1, has been postulated to be involved in this phenomenon. In light of this possible role, TGF-beta signaling and its downstream molecular effects were characterized in cultured vascular endothelial cells and pericytes of the retina. Methods. Bovine retinal endothelial cells and pericytes were stimulated with TGF-beta1 in the presence or absence of SD-208, a specific inhibitor of the TGF-beta type I receptor ALK5, or ALK5 small interfering (si)RNA. TGF-beta-signaling pathways were characterized by analysis of phosphorylated Smad2 or -1/5/8 proteins and TGF-beta target genes (PAI-1, fibronectin, CTGF, Smad7, and Id1) and protein (fibronectin). Results. ALK5 was expressed in both cell types, whereas ALK1 was exclusively expressed in endothelial cells. In endothelial cells, TGF-beta induced Smad2 phosphorylation at high concentrations, which was efficiently blocked by ALK5 inhibition. In contrast, in pericytes, Smad2 phosphorylation was rapidly induced at low concentrations of TGF-beta. The ALK1-Smad1/5/8 pathway was activated by TGF-beta in endothelial cells only. TGF-beta caused ALK5-mediated upregulation of PAI-1, Smad7, and fibronectin and in pericytes at lower TGF-beta concentrations than in endothelial cells. CTGF mRNA expression was induced only in pericytes. Fibronectin protein was confirmed to be regulated by TGF-beta in both cell types. Conclusions. TGF-beta signaling in retinal endothelial cells and pericytes show that these cells, and in particular the pericytes, have the essential characteristics to allow for a role of TGF-beta in BL thickening in preclinical diabetic retinopathy.