Mesenchymal stromal cells (MSCs) are one of major components of the tumour microenvironment. Recent studies have shown that MSC tumour residence and their close interactions with inflammatory factors are important factors that affect tumour progression. Among tumour-associated inflammatory factors, transforming growth factor β (TGFβ) is regarded as a key determinant of malignancy. By employing a lung metastasis model of a murine breast cancer, we show here that the prometastatic effect of MSCs was dependent on their response to TGFβ. Interestingly, we found that MSC-produced CXCL12, an important chemokine in tumour metastasis, was markedly inhibited by TGFβ. Furthermore, silencing of CXCL12 in TGFβ-unresponsive MSCs restored their ability to promote tumour metastasis. We found that 4T1 breast cancer cells expressed high levels of CXCR7, but not of CXCR4, both of which are CXCL12 receptors. In presence of CXCL12, CXCR7 expression on tumour cells was decreased. Indeed, when CXCR7 was silenced in breast cancer cells, their metastatic ability was inhibited. Therefore, our data demonstrated that sustained expression of CXCL12 by MSCs in the primary tumour site inhibits metastasis through reduction of CXCR7, while, in the presence of TGFβ, this CXCL12 effect of MSCs on tumour cells is relieved. Importantly, elevated CXCR7 and depressed CXCL12 expression levels were prominent features of clinical breast cancer lesions and were related significantly with poor survival. Our findings reveal a novel mechanism of MSC effects on malignant cells through which crosstalk between MSCs and TGFβ regulates tumour metastasis.