Transforming growth factor-β (TGF-β) signaling triggers diverse biological actions in inflammatory diseases. In tissue fibrosis, it acts as a key pathogenic regulator for promoting immunoregulation via controlling the activation, proliferation, and apoptosis of immunocytes. In cancer, it plays a critical role in tumor microenvironment (TME) for accelerating invasion, metastasis, angiogenesis, and immunosuppression. Increasing evidence suggest a pleiotropic nature of TGF-β signaling as a critical pathway for generating fibrotic TME, which contains numerous cancer-associated fibroblasts (CAFs), extracellular matrix proteins, and remodeling enzymes. Its pathogenic roles and working mechanisms in tumorigenesis are still largely unclear. Importantly, recent studies successfully demonstrated the clinical implications of fibrotic TME in cancer. This review systematically summarized the latest updates and discoveries of TGF-β signaling in the fibrotic TME.