Cancer-associated fibroblasts (CAFs), as the activated fibroblasts in the tumor stroma, are important modifiers of tumour progression. In the present study, we observed that azoxymethane and dextran sodium sulfate treatments induced increasingly severe colorectal mucosal inflammation and the intratumoural accumulation of CAFs. Fibroblast growth factor (FGF)-1 and FGF-3 were detected in infiltrating cells, and FGFR4, the specific receptor for FGF-1 and FGF-3, was detected in colon cancer tissues. The phosphorylation of FGFR4 enhanced the production of metalloproteinase (MMP)-7 and mitogen-activated protein kinase kinase (Mek)/extracellular signal-regulated kinase (Erk), which was accompanied by excessive vessel generation and cell proliferation. Moreover, we separated CAFs, pericarcinoma fibroblasts (PFs), and normal fibroblasts (NFs) from human colon tissue specimens to characterize the function of CAFs. We observed that CAFs secrete more FGF-1/-3 than NFs and PFs and promote cancer cell growth and angiogenesis through the activation of FGFR4, which is followed by the activation of Mek/Erk and the modulation of MMP-7 expression. The administration of FGF-1/-3-neutralizing antibodies or the treatment of cells with FGFR4 siRNA or the FGFR4 inhibitor PD173074 markedly suppressed colon cancer cell proliferation and neovascularization. These observations suggest a crucial role for CAFs and FGF signaling in the initiation and progression of colorectal cancer. The inhibition of the FGF signaling pathway may be a useful strategy for the treatment of colon cancer.