Transforming growth factor-beta (TGF-beta) is a secreted polypeptide that signals via receptor serine/threonine kinases and intracellular Smad effectors. TGF-beta inhibits proliferation and induces apoptosis in various cell types, and accumulation of loss-of-function mutations in the TGF-beta receptor or Smad genes classify the pathway as a tumor suppressor in humans. In addition, various oncogenic pathways directly inactivate the TGF-beta receptor-Smad pathway, thus favoring tumor growth. On the other hand, all human tumors overproduce TGF-beta whose autocrine and paracrine actions promote tumor cell invasiveness and metastasis. Accordingly, TGF-beta induces epithelial-mesenchymal transition, a differentiation switch that is required for transitory invasiveness of carcinoma cells. Tumor-derived TGF-beta acting on stromal fibroblasts remodels the tumor matrix and induces expression of mitogenic signals towards the carcinoma cells, and upon acting on endothelial cells and pericytes, TGF-beta regulates angiogenesis. Finally, TGF-beta suppresses proliferation and differentiation of lymphocytes including cytolytic T cells, natural killer cells and macrophages, thus preventing immune surveillance of the developing tumor. Current clinical approaches aim at establishing novel cancer drugs whose mechanisms target the TGF-beta pathway. In conclusion, TGF-beta signaling is intimately implicated in tumor development and contributes to all cardinal features of tumor cell biology.