Background: Higher frequency of Smad4 inactivation or loss of expression is observed in metastasis of colorectal cancer (CRC) leading to unfavourable survival and contributes to chemoresistance. However, the molecular mechanism of how Smad4 regulates chemosensitivity of CRC is unknown. Methods: We evaluated how the loss of Smad4 in CRC enhanced chemoresistance to 5-fluorouracil (5-FU) using two CRC cell lines in vitro and in vivo. Immunoblotting with cell and tumour lysates and immunohistochemical analyses with tissue microarray were performed. Results: Knockdown or loss of Smad4 induced tumorigenicity, migration, invasion, angiogenesis, metastasis, and 5-FU resistance. Smad4 expression in mouse tumours regulated cell-cycle regulatory proteins leading to Rb phosphorylation. Loss of Smad4 activated Akt pathway that resulted in upregulation of anti-apoptotic proteins, Bcl-2 and Bcl-w, and Survivin. Suppression of phosphatidylinositol-3-kinase (PI3K)/Akt pathway by LY294002 restored chemosensitivity of Smad4-deficient cells to 5-FU. Vascular endothelial growth factor-induced angiogenesis in Smad4-deficient cells might also lead to chemoresistance. Low levels of Smad4 expression in CRC tissues correlated with higher levels of Bcl-2 and Bcl-w and with poor overall survival as observed in immunohistochemical staining of tissue microarrays. Conclusion: Loss of Smad4 in CRC patients induces resistance to 5-FU-based therapy through activation of Akt pathway and inhibitors of this pathway may sensitise these patients to 5-FU.