Increasing evidence points to an active stromal involvement in cancer initiation and progression. Cytokines derived from tumor cells are believed to modulate stromal cells to produce growth and angiogenic factors, which in turn provide the tumor with the necessary microenvironment for expansion and invasion. Transforming growth factor beta (TGFbeta) has been implicated as a candidate cytokine to mediate this communication. However, how its signaling in stromal cells regulates tumorigenesis and tumor progression remains unresolved. We show that normal, presenescent fibroblasts or prostate stromal cells cotransplanted with prostate carcinoma cells s.c. into nude mice reduced tumor latency and accelerated tumor growth. When their TGFbeta signaling was blocked, the fibroblasts and stromal cells still stimulated tumor initiation but no longer supported tumor growth as control cells did. The loss of the tumor growth-promoting activity of the stromal cells with attenuated TGFbeta signaling was not associated with altered cellular senescence or tumor angiogenicity. TGFbeta and the medium conditioned by the prostate carcinoma cells stimulated myofibroblast differentiation of the intact stromal cells, but not the stromal cells with attenuated TGFbeta signaling. Gene microarray and quantitative reverse transcription-PCR analyses showed that TGFbeta up-regulated a host of genes in stromal cells that are involved in tissue remodeling and wound healing. Thus, our study provides evidence for TGFbeta as a supporting agent in tumor progression through the induction of a perpetual wound healing process in the tumor microenvironment.