Cancer-associated fibroblasts (CAFs) are the major component of the tumor stroma. They mediate various attributes of tumor cells, such as cell growth, migration, invasion, angiogenesis, metabolic reprogramming, apoptosis, immune regulation, and extracellular matrix reconstitution, all related to cancer progression and treatment resistance. Although many researchers have recognized CAF heterogeneity, recent technological advances have emphasized the functional and phenotypic diversity of CAFs in cancer progression. Why are these CAF subtypes generated within tumor tissues? And how do cancer cells dictate such heterogeneous subtypes of CAFs? This review will highlight the CAF subtypes within the tumor microenvironment and their role in tumor progression. CAF subtype induction by extracellular vesicles (EVs) and their significance, which we reported previously, is also discussed.