Transforming growth factor-β (TGF-β) plays complex dual roles as an inhibitor and promoter of tumor progression. Although the influence of the stromal microenvironment on tumor progression is well recognized, little is known about the functions of TGF-β signaling in the stroma during tumor progression. Using cre-lox technology, expression of the type II TGF-β receptor was selectively knocked out in fibroblasts (Tgfbr2^FspKO). In a co-xenograft model, we show that Tgfbr2^FspKO fibroblasts enhance mammary carcinoma growth and metastasis in mice while increasing hepatocyte growth factor (HGF) expression and c-Met signaling downstream pathways including signal transducers and activators of transcription 3 (Stat3) and p42/44 mitogen-activated protein kinase (MAPK). Treatment of tumor-bearing mice with a pharmacologic inhibitor (EXEL-7592) of c-Met blocks tumor progression and reduces levels of phospho-Stat3 and phospho-p42/44 MAPK. Similarly, small interfering RNA knockdown of c-Met expression in mammary tumor cells reduces metastasis and c-Met signaling caused by Tgfbr2^FspKO fibroblasts. The results show that TGF-β signaling in fibroblasts suppresses tumor metastasis by antagonizing HGF/c-Met signaling within tumor epithelial cells. Furthermore, this co-xenograft model represents a unique context to study stromal TGF-β and HGF signaling in mammary tumorigenesis. [Cancer Res 2007;67(10):4869–77]