Transforming growth factor-beta (TGF-beta) signals through receptor serine/threonine kinases and intracellular Smad effectors, regulating numerous epithelial cell processes. TGF-beta plays a crucial role in the cancer initiation and progression through tumor cell autonomous signaling and interactions with tumor microenvironment, but is featured with a butterfly effect upon the stages of tumorigenesis. TGF-beta signaling acts as a suppressor of epithelial cell tumorigenesis at early stages, but promotes tumor progression by enhancing migration, invasion, and survival of the tumor cells during the later stages. TGF-beta signaling also cross-talks with other cell survival signaling pathways. Tumor microenvironment contains many distinct cell types, which substantially influences the tumor cell growth and survival, and the invasion and metastasis. TGF-beta in the microenvironment, produced by cancer and/or stromal cells, is high and negatively correlates with disease progression and patient prognosis. Therefore, TGF-beta may affect tumor progression by multiple mechanisms in addition to its direct action on tumor cells, and the diversities of TGF-beta signaling in tumors imply a need for caution to TGF-beta-targeted strategies of tumor prevention and/or therapeutics.