Tumor budding occurs at the invasive front of cancer; the tumor cells involved have metastatic and stemness features, indicating a poor prognosis. Tumor budding is partly responsible for cancer metastasis, and its initiation is based on the epithelial-mesenchymal transition (EMT) process. The EMT process involves the conversion of epithelial cells into migratory and invasive cells, and is a profound event in tumorigenesis. The EMT, associated with the formation of cancer stem cells (CSCs) and resistance to therapy, results from a combination of gene mutation, epigenetic regulation, and microenvironmental control. Tumor budding can be taken to represent the EMT in vivo. The EMT process is under the influence of the tumor microenvironment as well as tumor cells themselves. Here, we demonstrate that the tumor microenvironment dominates EMT development and impacts cancer metastasis, as well as promotes CSC formation and mediates drug resistance. In this review, we mainly discuss components of the microenvironment, such as the extracellular matrix (ECM), inflammatory cytokines, metabolic products, and hypoxia, that are involved in and impact on the acquisition of tumor-cell motility and dissemination, the EMT, metastatic tumor-cell formation, tumor budding and CSCs, and cancer metastasis, including subsequent chemo-resistance. From our point of view, the tumor microenvironment now constitutes a promising target for cancer therapy.