Infiltration of skin tumours by macrophages is an important step in tumour progression, although the mechanisms of macrophage recruitment to the tumour mass and the subsequent effects on tumour growth are poorly understood. Transfecting a murine regressing skin tumour with the gene for transforming growth factor (TGF)beta enabled the tumours to grow progressively in vivo thus allowing us to study the role of this cytokine in tumour growth. Flow cytometry was used to show that TGFbeta-mediated tumour progression was accompanied by an increase in tumour-associated macrophages (TAM) and a decrease in tumour-infiltrating dendritic cells (DCs). TAM in TGFbeta-secreting tumours expressed lower levels of major histocompatibility complex II and CD86 compared to DC in control tumours and had a high phagocytic capacity as measured by uptake of latex beads in vivo. Indeed, TGFbeta was directly responsible not only for the enhanced macrophage phagocytosis but also altering the ratio of antigen-presenting cells to favour macrophages over DC. Our results demonstrate that TGFbeta recruitment and retention of macrophages at the tumour site enable effective tumour evasion of the host immune system and reinforces the need to target TGFbeta in human cancer immunotherapy trials.