Compelling evidences have rendered the tumor microenvironment a crucial determinant in cancer outcome. Activating transcription factor 3 (ATF3), a stress response transcription factor, is known to have a dichotomous role in tumor cells, acting either as a tumor suppressor or an oncogene in a context-dependent manner. However, its expression and possible role in the tumor microenvironment are hitherto unknown. Here we show that ATF3 is upregulated in the stromal compartment of several types of cancer. Accordingly, Cancer-associated fibroblasts (CAFs) ectopically expressing ATF3 proliferated faster as indicated by increased colony-forming capacity and promoted the growth of adjacent tumor cells when co-injected into nude mice. Utilizing a genome-wide profiling approach, we unraveled a robust gene expression program induced by ATF3 in CAFs. Focusing on a specific subset of genes, we found that the ability of stromal ATF3 to promote cancer progression is mediated by transcriptional repression of CLDN1 and induction of CXCL12 and RGS4. In addition, regulation of LIF, CLDN1, SERPINE2, HSD17B2, ITGA7 and PODXL by ATF3 mediated the increased proliferation capacity of CAFs. In sum, our findings implicate ATF3 as a novel stromal tumor promoter and suggest that targeting ATF3 pathway might be beneficial for anticancer therapy.