Human breast milk is rich in nutrients, hormones, growth factors and immunoactive molecules, which influence the growth, development and immune status of the newborn infant. Although several of these factors are also present in bovine milk, the greater susceptibility of the formula-fed infant to infection and disease and the development of allergy is often attributed to the reduced level of protective factors in milk formulas. Nevertheless, modifying manufacturing processes may preserve the biological activity of some bioactive molecules in end products. Transforming growth factor (TGF)-beta is one such molecule. TGF-beta is a polypeptide, which has been described in both human and bovine milk. It is implicated in many processes, including epithelial cell growth and differentiation, development, carcinogenesis and immune regulation. The present article discusses the biological activity of TGF-beta2 that has been preserved and activated in a cow's milk-based product. More specifically, it addresses possible mechanisms of action in the intestinal lumen and speculates on how milk products containing naturally occurring TGF-beta2 could be exploited in functional foods for the infant or as therapies for specific intestinal diseases.