Transforming growth factor-beta (TGF-beta) is a multifunctional cytokine that functions to inhibit mammary tumorigenesis by directly inducing mammary epithelial cells (MECs) to undergo cell cycle arrest or apoptosis, and to secrete a variety of cytokines, growth factors, and extracellular matrix proteins that maintain cell and tissue homeostasis. Genetic and epigenetic events that transpire during mammary tumorigenesis typically inactivate the tumor suppressing activities of TGF-beta and ultimately confer this cytokine with tumor promoting activities, including the ability to stimulate breast cancer invasion, metastasis, angiogenesis, and evasion from the immune system. This dramatic conversion in TGF-beta function is known as the "TGF-beta paradox" and reflects a variety of dynamic alterations that occur not only within the developing mammary carcinoma, but also within the cellular and structural composition of its accompanying tumor microenvironment. Recent studies have begun to elucidate the critical importance of mammary tumor microenvironments in manifesting the TGF-beta paradox and influencing the response of developing mammary carcinomas to TGF-beta. Here we highlight recent findings demonstrating the essential function of tumor microenvironments in regulating the oncogenic activities of TGF-beta and its stimulation of metastatic progression during mammary tumorigenesis.