Throughout tumorigenesis, the co-evolution of tumor cells and their surrounding microenvironment leads to the development of malignant phenotypes. Cellular communication within the tumor microenvironment (TME) plays a critical role in influencing various aspects of tumor progression, including invasion and metastasis. The release of exosomes, a type of extracellular vesicle, by most cell types in the body, is an essential mediator of intercellular communication. A growing body of research indicates that tumor-derived exosomes (TDEs) significantly expedite tumor progression through multiple mechanisms, inducing epithelial-mesenchymal transition and macrophage polarization, enhancing angiogenesis, and aiding in the immune evasion of tumor cells. Herein, we describe the formation and characteristics of the TME, and summarize the contents of TDEs and their diverse functions in modulating tumor development. Furthermore, we explore potential applications of TDEs in tumor diagnosis and treatment.