Transforming growth factor β (TGF-β) is a multifunctional cytokine regulating homeostasis and immune responses in adult animals and humans. Aberrant and overactive TGF-β signaling promotes cancer initiation and fibrosis through epithelial–mesenchymal transition (EMT), as well as the invasion and metastatic growth of cancer cells. TGF-β is a key factor that is active during hypoxic conditions in cancer and is thereby capable of contributing to angiogenesis in various types of cancer. Another potent role of TGF-β is suppressing immune responses in cancer patients. The strong tumor-promoting effects of TGF-β and its profibrotic effects make it a focus for the development of novel therapeutic strategies against cancer and fibrosis as well as an attractive drug target in combination with immune regulatory checkpoint inhibitors. TGF-β belongs to a family of cytokines that exert their function through signaling via serine/threonine kinase transmembrane receptors to intracellular Smad proteins via the canonical pathway and in combination with co-regulators such as the adaptor protein and E3 ubiquitin ligases TRAF4 and TRAF6 to promote non-canonical pathways. Finally, the outcome of gene transcription initiated by TGF-β is context-dependent and controlled by signals exerted by other growth factors such as EGF and Wnt. Here, we discuss the synergistic cooperation between TGF-β and hypoxia in development, fibrosis and cancer.