Inflammation is a primary defense process against various extracellular stimuli, such as viruses, pathogens, foods, and environmental pollutants. When cells respond to stimuli for short periods of time, it results in acute or physiological inflammation. However, if the stimulation is sustained for longer time or a pathological state occurs, it is known as chronic or pathological inflammation. Several studies have shown that tumorigenesis in the gastrointestinal (GI) tract is closely associated with chronic inflammation, for which abnormal cellular alterations that accompany chronic inflammation such as oxidative stresses, gene mutations, epigenetic changes, and inflammatory cytokines, are shared with carcinogenic processes, which forms a critical cross-link between chronic inflammation and carcinogenesis. Transforming growth factor (TGF)-beta is a multi-potent cytokine that plays an important role in regulation of cell growth, apoptosis and differentiation. Most importantly, TGF-beta is a strong anti-inflammatory cytokine that regulates the development of effector cells. TGF-beta has a suppressive effect on carcinogenesis under normal conditions by inhibiting abnormal cell growth, but on the other hand, many GI cancers originate from uncontrolled cell growth and differentiation by genetic loss of TGF-beta signaling molecules or perturbation of TGF-beta adaptors. Once a tumor has developed, TGF-beta exerts a promoting effect on the tumor itself and stromal cells to enhance cell growth, alter the responsiveness of tumor cells to stimulate invasion and metastasis, and inhibited immune surveillance. Therefore, novel development of therapeutic agents to inhibit TGF-beta-induced progression of tumor and to retain its growth inhibitory activities, in addition to anti-inflammatory actions, could be useful in oncology. In this review, we discuss the role of TGF-beta in inflammation and carcinogenesis of the GI tract related to abnormal TGF-beta signaling.