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Cadmium has been widely used in industry and is known to be carcinogenic to humans. Although it is widely accepted that chronic exposure to cadmium increases the incidence of cancer, the mechanisms underlying cadmium-induced carcinogenesis are unclear. The main aim of this study was to investigate the role of reactive oxygen species (ROS) in cadmium-induced carcinogenesis and the signal transduction pathways involved. Chronic exposure of human bronchial epithelial BEAS-2B cells to cadmium induced cell transformation, as evidenced by anchorage-independent growth in soft agar and clonogenic assays. Chronic cadmium treatment also increased the potential of these cells to invade and migrate. Injection of cadmium-stimulated cells into nude mice resulted in the formation of tumors. In contrast, the cadmium-mediated increases in colony formation, cell invasion and migration were prevented by transfection with catalase, superoxide dismutase-1 (SOD1), or SOD2. In particular, chronic cadmium exposure led to activation of signaling cascades involving PI3K, AKT, GSK-3β, and β-catenin and transfection with each of the above antioxidant enzymes markedly inhibited cadmium-mediated activation of these signaling proteins. Inhibitors specific for AKT or β-catenin almost completely suppressed the cadmium-mediated increase in total and active β-catenin proteins and colony formation. Moreover, there was a marked induction of AKT, GSK-3β, β-catenin, and carcinogenic markers in tumor tissues formed in mice after injection with cadmium-stimulated cells. Collectively, our findings suggest a direct involvement of ROS in cadmium-induced carcinogenesis and implicate a role of AKT/GSK-3β/β-catenin signaling in this process.