The poor prognosis of glioblastoma (GBM) routinely treated with ionizing radiation (IR) has been attributed to the relative radioresistance of glioma-initiating cells (GIC). Other studies indicate that although GIC are sensitive, the response is mediated by undefined factors in the microenvironment. GBM produce abundant transforming growth factor-β (TGF-β), a pleotropic cytokine that promotes effective DNA damage response. Consistent with this, radiation sensitivity, as measured by clonogenic assay of cultured murine (GL261) and human (U251, U87MG) glioma cell lines, increased by approximately 25% when treated with LY364947, a small-molecule inhibitor of TGF-β type I receptor kinase, before irradiation. Mice bearing GL261 flank tumors treated with 1D11, a pan-isoform TGF-β neutralizing antibody, exhibited significantly increased tumor growth delay following IR. GL261 neurosphere cultures were used to evaluate GIC. LY364947 had no effect on the primary or secondary neurosphere-forming capacity. IR decreased primary neurosphere formation by 28%, but did not reduce secondary neurosphere formation. In contrast, LY364947 treatment before IR decreased primary neurosphere formation by 75% and secondary neurosphere formation by 68%. Notably, GL261 neurospheres produced 3.7-fold more TGF-β per cell compared with conventional culture, suggesting that TGF-β production by GIC promotes effective DNA damage response and self-renewal, which creates microenvironment-mediated resistance. Consistent with this, LY364947 treatment in irradiated GL261 neurosphere-derived cells decreased DNA damage responses, H2AX and p53 phosphorylation, and induction of self-renewal signals, Notch1 and CXCR4. These data motivate the use of TGF-β inhibitors with radiation to improve therapeutic response in patients with GBM.