Signal transduction initiated by transforming growth factor beta 1 (TGF beta 1) was studied in two sublines of the same colon carcinoma cell line, which respond in opposite ways to TGF beta 1, by proliferation or by growth inhibition. TGF beta 1 activates ras proteins within 5 min of addition when it acts to inhibit growth but not when it acts as a mitogen. In both cases TGF beta 1 also rapidly modulates the activities of three protein kinases, detected by their in gel kinase activity on the mitogen-activated protein kinase (MAP kinase) substrate, myelin basic protein (MBP). When TGF beta 1 acts as a mitogen for U9 cells, it increases the activity of MBP kinases of 57, 105, and 130 kDa within 10 min of the addition without detectably activating ras proteins. When TGF beta 1 inhibits the growth of HD3 cells, it activates ras proteins and the 57-kDa MBP kinase within 5 min but inhibits the activity of the 105- and 130-kDa MBP kinases. In HD3 cells ras activation occurred in two signal transduction pathways, one from TGF beta 1 leading to growth inhibition and one from epidermal growth factor (EGF) leading to proliferation. In addition to ras proteins, EGF activates a different set of MBP kinases in HD3 cells than does TGF beta 1, MBP kinases of 85, 57, and 44 kDa. The latter is likely to be the 44-kDa MAP kinase extracellular signal-regulated kinase (erk) 1, because EGF treatment of HD3 cells activates erk1 by increasing its phosphotyrosine level. Therefore, in two closely related epithelial cell lines TGF beta 1 activates two different signal transduction pathways, one ras-dependent and one ras-independent, and modulates the activities of a set of MBP kinases.