Stromal fibroblasts become altered in response to solid cancers, to exhibit myofibroblastic characteristics, with disease promoting influence. Infiltrating mesenchymal stem cells (MSC) may contribute towards these changes, but the factors secreted by cancer cells that impact MSC differentiation are poorly understood. We investigated the role of nano-metre sized vesicles (exosomes), secreted by prostate cancer cells, on the differentiation of bone-marrow MSC (BM-MSC), and the subsequent functional consequences of such changes. Purified exosomes impaired classical adipogenic differentiation, skewing differentiation towards alpha-smooth muscle actin (αSMA) positive myofibroblastic cells. A single exosomes treatment generated myofibroblasts secreting high levels of VEGF-A, HGF and matrix regulating factors (MMP-1, -3 and -13). Differentiated MSC had pro-angiogenic functions and enhanced tumour proliferation and invasivity assessed in a 3D co-culture model. Differentiation was dependent on exosomal-TGFβ, but soluble TGFβ at matched dose could not generate the same phenotype. Exosomes present in the cancer cell secretome were the principal factors driving this phenotype. Prostate cancer exosomes dominantly dictate a programme of MSC differentiation generating myofibroblasts with functional properties consistent with disease promotion.