TGF-β has paradoxical effects on cancer cell proliferation, as it suppresses proliferation of normal epithelial and low-invasive cancer cells, but enhances that of high-invasive cancer cells. However, how cancer cells acquire the ability to evade the tumor-suppressing effects of TGF-β, yet still take advantage of its tumor-promoting effects, remains elusive. Here, we identified miR-106b as a molecular switch to determine TGF-β effects on cell proliferation. TGF-β1 enhances the transcription of miR-106b via a promoter independent of its host gene MCM7 by activating c-jun. In high-invasive breast cancer cells, miR-106b is upregulated by TGF-β1 at a much higher level than that in normal or low-invasive cancer cells. Accumulation of miR-106b counterbalances TGF-β growth-inhibiting effects by eliminating activated retinoblastoma (RB) and results in enhanced proliferation. Furthermore, miR-106b mediates TGF-β effects on tumor growth and metastasis in breast cancer xenografts. In addition, miR-106b expression is elevated in higher stage tumors and correlated with tumor progression in breast cancer patients. These findings suggest that high level of miR-106b induced by TGF-β determines the tumor-promoting effects of TGF-β in breast cancer.