Network I/O workloads are dominating as one of the leading costs for most of the virtualized clouds. One way to improve the inter virtual machine (VM) inefficiency is to build shared memory channels between VMs co-located on the same physical node to by-pass traditional TCP/IP network stack, so that the overhead is reduced by shorter communication path and fewer kernel interactions. However, it is a key challenge for existing work to achieve high performance inter-VM communication while keeping the capability of VM live migration, and most of existing work are neither seamlessly agile in the presence of VM live migration nor transparent to upper users as well as to operating system kernels, which limits the application of current co-location aware shared-memory based approaches. In this paper, we present the design and implementation of XenVMC, an adaptive and transparent inter-VM communication system for high performance network I/O in virtualized clouds. With proposed dynamic co-located VM membership update mechanism, XenVMC is applicable not only to intra-node VM communication, but also to cross-node communication. It also supports adaptive switching between shared-memory based channel and traditional network-based channel in case of VM live migration, with the aid of proposed VM migration perception and handling mechanisms. XenVMC enables efficient data transmission for both TCP and UDP workloads, with multilevel transparency guaranteed. Extensive experiments show that XenVMC achieves better performance for both TCP and UDP workloads with high transparency, compared with both native virtualized environment and representative existing work. Experimental results also show that it is capable of automatically handling VM migration correctly with acceptable latency.