Pancreatic cancer is one of the most lethal malignancies. To discover functionally relevant modulators of pancreatic neoplasia, we performed activity-based proteomic profiling on primary human ductal adenocarcinomas. Here, we identify retinoblastoma-binding protein 9 (RBBP9) as a tumor-associated serine hydrolase that displays elevated activity in pancreatic carcinomas. Whereas RBBP9 is expressed in normal and malignant tissues at similar levels, its elevated activity in tumor cells promotes anchorage-independent growth in vitro as well as pancreatic carcinogenesis in vivo. At the molecular level, RBBP9 activity overcomes TGF-beta-mediated antiproliferative signaling by reducing Smad2/3 phosphorylation, a previously unknown role for a serine hydrolase in cancer biology. Conversely, loss of endogenous RBBP9 or expression of mutationally inactive RBBP9 leads to elevated Smad2/3 phosphorylation, implicating this serine hydrolase as an essential suppressor of TGF-beta signaling. Finally, RBBP9-mediated suppression of TGF-beta signaling is required for E-cadherin expression as loss of the serine hydrolase activity leads to a reduction in E-cadherin levels and a concomitant decrease in the integrity of tumor cell-cell junctions. These data not only define a previously uncharacterized serine hydrolase activity associated with epithelial neoplasia, but also demonstrate the potential benefit of functional proteomics in the identification of new therapeutic targets.