Regulator-of-G-protein-signaling-5 (RGS5), a pro-apoptotic/anti-proliferative protein, is a signature molecule of tumor-associated pericytes, highly expressed in several cancers, and is associated with tumor growth and poor prognosis. Surprisingly, despite the negative influence of intrinsic RGS5 expression on pericyte survival, RGS5^highpericytes accumulate in progressively growing tumors. However, responsible factor(s) and altered-pathway(s) are yet to report. RGS5 binds with Gαi/q and promotes pericyte apoptosis in vitro, subsequently blocking GPCR-downstream PI3K-AKT signaling leading to Bcl2 downregulation and promotion of PUMA-p53-Bax-mediated mitochondrial damage. However, within tumor microenvironment (TME), TGFβ appeared to limit the cytocidal action of RGS5 in tumor-residing RGS5^highpericytes. We observed that in the presence of high RGS5 concentrations, TGFβ-TGFβR interactions in the tumor-associated pericytes lead to the promotion of pSmad2-RGS5 binding and nuclear trafficking of RGS5, which coordinately suppressed RGS5-Gαi/q and pSmad2/3-Smad4 pairing. The RGS5-TGFβ-pSmad2 axis thus mitigates both RGS5- and TGFβ-dependent cellular apoptosis, resulting in sustained pericyte survival/expansion within the TME by rescuing PI3K-AKT signaling and preventing mitochondrial damage and caspase activation. This study reports a novel mechanism by which TGFβ fortifies and promotes survival of tumor pericytes by switching pro- to anti-apoptotic RGS5 signaling in TME. Understanding this altered RGS5 signaling might prove beneficial in designing future cancer therapy.