Tumor-stroma interactions play a significant role in tumor development and progression. Our study employed an in vitro co-culture model of epithelial cells and fibroblasts to investigate the mechanism of and interaction between lung epithelial cell transformation and fibroblast activation induced by Yunnan tin mine dust. Epithelial cell transformation was evaluated using concanavalin A agglutination and anchorage-independent growth assays, and fibroblast activation was assessed via immunohistochemistry. The TGF-beta 1/Smad pathway was monitored by Western blot analysis and ELISA. We found concanavalin A agglutination and anchorage-independent growth assays of dust-exposed epithelial cells were positive, dust-exposed fibroblasts expressed alpha-SMA, and during the mine dust-induced tumorigenesis, TGF-beta 1/Smad signaling pathway changed. In conclusion, Yunnan tin mine dust is able to induce the malignant transformation of bronchial epithelial cells and fibroblast activation. Epithelial cells are the main target of mine dust. Bronchial epithelial cell transformation and fibroblast activation are correlated and synergistic. Their interdependence is related to the TGF-beta 1/Smad signaling pathway.