Cleft palate is among the most common birth defects in humans, caused by a failure in the complex multistep developmental process of palatogenesis. It has been recently shown that transforming growth factor β3 (Tgf-β3) is an absolute requirement for successful palatal fusion, both in mice and humans. However, very little is known about the mechanisms of Tgf-β3 signaling during this process. Here we show that putative Tgf-β type I receptors, Alk-1, Alk-2, and Alk-5, are all endogenously expressed in the palatal epithelium. Activation of Alk-5 in the Tgf-β3 (−/−) palatal epithelium is able to rescue palatal fusion, whereas inactivation of Alk-5 in the wild-type palatal epithelium prevents palatal fusion. The effect of Alk-2 is similar, but less pronounced. The induction of fusion by activation of Alk-5 or Alk-2 is stronger in the posterior parts of the palates at the embryonic day 14 (E14), while their activation at E13.5 also restores anterior fusion, reflecting the natural anterior–posterior direction of palate maturation in vivo. We also show that Smad2 is endogenously activated in the palatal midline epithelial seam (MES) during the fusion process. By using a mutant Alk-5 receptor that is an active kinase but is unable to activate Smads, we show that activation of Smad-independent Tgf-β responses is not sufficient to induce fusion of shelves deficient in Tgf-β3. Based on these observations, we conclude that the Smad2-dependent Alk-5 signaling pathway is dominant in palatal fusion driven by Tgf-β3.