Abstract The contributions of TGF-β signaling to cancer are complex but involve the inflammatory microenvironment as well as cancer cells themselves. In mice encoding a TGF-β mutant that precludes its binding to the latent TGF-β binding protein (Tgfb1−/C33S), we observed multiorgan inflammation and an elevated incidence of various types of gastrointestinal solid tumors due to impaired conversion of latent to active TGF-β1. By genetically eliminating activators of latent TGF-β1, we further lowered the amount of TGF-β, which enhanced tumor frequency and multiorgan inflammation. This model system was used to further investigate the relative contribution of TGF-β1 to lymphocyte-mediated inflammation in gastrointestinal tumorigenesis. Toward this end, we generated Tgfb1−/C33S;Rag2−/− mice that lacked adaptive immune function, which eliminated tumor production. Analysis of tissue from Tgfb1−/C33S mice indicated decreased levels of P-Smad3 compared with wild-type animals, whereas tissue from Tgfb1−/C33S;Rag2−/− mice had normal P-Smad3 levels. Inhibiting the inflammatory response normalized levels of interleukin (IL)-1β and IL-6 and reduced tumor cell proliferation. In addition, Tgfb1−/C33S;Rag2−/− mice exhibited reduced paracrine signaling in the epithelia, mediated by hepatocyte growth factor produced by gastric stroma. Together, our results indicate that many of the responses of the gastric tissue associated with decreased TGF-β1 may be directly or indirectly affected by inflammatory processes, which accompany loss of TGF-β1, rather than a direct effect of loss of the cytokine. Cancer Res; 74(9); 2642–51. ©2014 AACR.