Cell-cell fusion and vesicle-mediated transfer are fundamental biological processes that are emerging as novel mechanisms for re-programming cells in the tumor microenvironment. Both cell-cell fusion and intercellular transfer of vesicles (including microvesicles and exosomes) allow for the transfer of information among tumor cells, between tumor cells and tumor stroma, and between tumor cells and the host immune system, which could have profound implications for our understanding of tumor initiation and progression. The National Cancer Institute's Division of Cancer Biology sponsored a recent workshop (December 4-6, 2010) entitled, Vesicle Transfer and Cell Fusion: Emerging Concepts of Cell-Cell Communication in the Tumor Microenvironment to assess the current state of the science in these two scientific areas. Co-chaired by Drs. Huang-Ge Zhang (University of Louisville) and Madhav Dhodapkar (Yale University) this workshop brought together, for the first time at the NIH, leaders in the field to assess the effects of vesicle transfer and cell-cell fusion on cancer initiation, progression and metastasis. This meeting report includes brief summaries of the presentations and identifies the major questions, roadblocks, and opportunities. The meeting report is presented here to highlight research priorities and to stimulate basic and translational research efforts to better understand the contributions of cell-cell fusion and vesicle transfer to cancer.