A method that introduces a new stress vector function (the hexagonal stress vector) is applied to obtain, in closed form, the elastic fields due to an inclusion in transversely isotropic solids. The solution is an extension of Eshelby's solution for an ellipsoidal inclusion in isotropic solids. The Green's functions for double forces and double forces with moment are derived and these are then used to solve the inclusion problem. The elastic field inside the inclusion is expressed in terms of the newtonian and biharmonic potential functions, which are similar to those needed for the solution in isotropic solids. Two more harmonic potential functions are introduced to express the solution outside the inclusion. The constrained strain inside the inclusion is uniform and the relation between the constrained strain and the misfit strain has the same characteristics as those of the Eshelby tensor for isotropic solids, namely, the coefficients coupling an extension to a shear or one shear to another are zero. The explicit closed form expression of this tensor is given. The inhomogeneity problem is then solved by using Eshelby's equivalent inclusion method. The solution for the thermoelastic displacements due to thermal inhomogeneities is also presented.