Tumors present a complex composition of cancer and stromal cells that interact by direct cell-to-cell contact, extracellular matrix (ECM) proteins, cytokines, and growth factors. Fibroblasts represent a major cell type in the tumor stroma and participate actively in the process of tumorigenesis. These stromal cells, commonly termed cancer-associated fibroblasts (CAFs), are phenotypically different to their normal counterparts in physiological tissues, and often show myofibroblastic characteristics. Based on similarities with wound healing and inflammatory diseases, transforming growth factor-β (TGF-β) is considered to be the main factor involved in fibroblast recruitment, activation, and also differentiation to myofibroblasts. This review presents experimental evidence on the important role of TGF-β in fibroblast-epithelial interaction, as obtained from in vitro studies and from animal models. Additionally, global gene expression analyses of TGF-β stimulated fibroblasts and CAFs from the in situ environment suggest a TGF-β signature in the tumor stroma. While previous studies support a tumor stimulating effect of TGF-β via fibroblast activation, some recent studies utilizing genetically engineered mice models, indicate an opposite effect on tumor growth. Thus, similar to the dualistic effects of TGF-β on epithelial cells, the TGF-β response on CAFs is also highly context-dependent. The general connection between CAF biology and TGF-β function in tumorigenesis provides a new opportunity for novel stroma-based strategies in anticancer therapy.