Epithelial and hematopoietic cells have a high turnover and their progenitor cells divide continuously, making them prime targets for genetic and epigenetic changes that lead to cell transformation and tumorigenesis. The consequent changes in cell behavior and responsiveness result not only from genetic alterations such as activation of oncogenes or inactivation of tumor suppressor genes, but also from altered production of, or responsiveness to, stimulatory or inhibitory growth and differentiation factors. Among these, transforming growth factor β (TGF-β) and its signaling effectors act as key determinants of carcinoma cell behavior. The autocrine and paracrine effects of TGF-β on tumor cells and the tumor micro-environment exert both positive and negative influences on cancer development. Accordingly, the TGF-β signaling pathway has been considered as both a tumor suppressor pathway and a promoter of tumor progression and invasion. Here we evaluate the role of TGF-β in tumor development and attempt to reconcile the positive and negative effects of TGF-β in carcinogenesis.