Over 200 million people have, and another 600 million are at risk of contracting, schistosomiasis, one of the major neglected tropical diseases. Transmission of this infection, which is caused by helminth parasites of the genus Schistosoma, depends upon the release of parasite eggs from the human host. However, approximately 50% of eggs produced by schistosomes fail to reach the external environment, but instead become trapped in host tissues where pathological changes caused by the immune responses to secreted egg antigens precipitate disease. Despite the central importance of egg production in transmission and disease, relatively little is understood of the molecular processes underlying the development of this key life stage in schistosomes. Here, we describe a novel parasite-encoded TGF-beta superfamily member, Schistosoma mansoni Inhibin/Activin (SmInAct), which is key to this process. In situ hybridization localizes SmInAct expression to the reproductive tissues of the adult female, and real-time RT-PCR analyses indicate that SmInAct is abundantly expressed in ovipositing females and the eggs they produce. Based on real-time RT-PCR analyses, SmInAct transcription continues, albeit at a reduced level, both in adult worms isolated from single-sex infections, where reproduction is absent, and in parasites from IL-7R(-/-) mice, in which viable egg production is severely compromised. Nevertheless, Western analyses demonstrate that SmInAct protein is undetectable in parasites from single-sex infections and from infections of IL-7R(-/-) mice, suggesting that SmInAct expression is tightly linked to the reproductive potential of the worms. A crucial role for SmInAct in successful embryogenesis is indicated by the finding that RNA interference-mediated knockdown of SmInAct expression in eggs aborts their development. Our results demonstrate that TGF-beta signaling plays a major role in the embryogenesis of a metazoan parasite, and have implications for the development of new strategies for the treatment and prevention of an important and neglected human disease.