Stromal fibroblasts regulate epithelial cell behavior through direct and indirect cell–cell interactions. To clarify the role of TGF-β signaling in stromal fibroblasts during mammary development and tumorigenesis, we conditionally knocked out the TGF-β type II receptor gene in mouse mammary fibroblasts (Tgfbr2 fspKO). Tgfbr2 fspKO mice exhibit defective mammary ductal development, characterized in part by increased ductal epithelial cell turnover associated with an increase in stromal fibroblast abundance. Tgfbr2 fspKO mammary fibroblasts transplanted with mammary carcinoma cells promote growth and invasion, which is associated with increased activating phosphorylation of the receptors: erbB1, erbB2, RON, and c-Met. Furthermore, the increased receptor phosphorylation correlates with increased secretion of the cognate ligands by Tgfbr2 fspKO fibroblasts. Treatment of tumor cells with fibroblast-conditioned medium leads to increased tumor cell proliferation and motility, which are blocked by addition of pharmacologic inhibitors of TGF-α signaling or neutralizing antibodies to macrophage-stimulating protein (MSP), HGF, or c-Met. These studies characterize a significant role for stromal TGF-β signaling in mammary tissue homeostasis and mammary tumor progression via regulation of TGF-α, MSP, and HGF signaling pathways.