Gastric cancer is an intractable disease with a high incidence of peritoneal dissemination and obstructive symptoms (e.g. ileus, jaundice, and hydronephrosis) arising from accompanying marked fibrosis. Microenvironmental interactions between cancer cells and stromal cells are the suggested cause of the disease. Transforming growth factor (TGF-β) is an intriguing cytokine exhibiting dual roles in malignant disease, acting as an important mediator of cancer invasion, metastasis, and angiogenesis as well as exhibiting antitumor functions. Moreover, the TGF-β pathway contributes to the generation of a favorable microenvironment for tumor growth and metastasis throughout the steps of carcinogenesis. Among these effects, TGF-β induces the epithelial-to-mesenchymal transition with prometastatic functions, contributes to the conversion of stromal cells to carcinoma-associated fibroblasts, and suppresses the function of immune cells, which compromises the antitumor immune response, leading to cancer progression and stromal fibrosis. In this review, we address the role of the essential TGF-β signaling pathway in the regulation of the activities of components of the tumor microenvironment of gastric cancer and how this contributes to tumor progression and stromal fibrosis. We then explore the potential to optimize therapy that inhibits TGF-β signaling in the preclinical and clinical settings of gastric cancer.