Tumor cells undergoing the epithelial-mesenchymal transition (EMT) acquire the capacity to migrate, invade the stroma and metastasize. EMT cells also acquire stem cell characteristics suggesting crosstalk between EMT and stem cell pathways and contribution of the EMT process to the generation of cancer stem cells. Indeed, transforming growth factor-beta (TGF-β), a major inducer of EMT, cooperates with stem cell pathways like Wnt, Ras, Hedgehog and Notch to induce EMT. A molecular basis for this cooperative signaling is indicated by recent data showing that many EMT associated transcription factors like Snail1, Zeb1/2, Twist, β-catenin, Lef/TCF, Foxc2 and AP-1 interact with Smads and form EMT promoting Smad complexes (EPSC) engaged in both repressing epithelial genes and activating mesenchymal genes. Thus, formation and activation of EPSC seems to represent a point of convergence between EMT and stem cell pathways. Here, we review our current understanding of the mechanisms involved in the transcriptional crosstalk between TGF-β and stem cell pathways and discuss how a fundament for the activation of these mechanisms may lead to the induction of EMT in tumors.