Transforming growth factor-beta1 (TGF-beta1) promotes cancer progression by regulating tumor cell growth and angiogenesis and high levels of TGF-beta1 have been associated with metastatic disease and poor prognosis in breast cancer patients. We have previously reported anti-angiogenic effects of the anti-estrogen tamoxifen in breast cancer, by increased matrix metalloproteinase-9 (MMP-9) activity and generation of endostatin. Here, we show that exposure of tamoxifen to ER-positive breast cancer cells for 7 days, decreased extracellular TGF-beta1. Intracellular TGF-beta1 levels were unaffected by tamoxifen treatment, indicating a post-translational regulation of TGF-beta1. Inhibition of MMP activity restored TGF-beta1 levels, suggesting an involvement of MMP activities in the down-regulation of TGF-beta1 by tamoxifen. Moreover, using an in vivo model of solid MCF-7 tumors in nude mice, we analyzed tumor levels of TGF-beta1 after in vivo treatment with estradiol and tamoxifen. Exposure of tumor-bearing mice to tamoxifen significantly decreased tumor TGF-beta1 protein levels, tumor growth and angiogenesis. In conclusion, our findings suggest a novel mechanism of action of tamoxifen in breast cancer via sex steroid dependent modulation of the proteolytic tumor microenvironment resulting in reduced extracellular TGF-beta1 levels.