Activation of hepatic stellate cells (HSCs) is the key step in liver fibrogenesis. Increased transforming growth factor beta (TGF-beta) expression and extracellular matrix production in patients with hepatic fibrosis and experimental models of liver fibrogenesis support implication of TGF-beta in the pathogenesis of this disease. However, a causative role for TGF-beta during transdifferentiation of HSCs has not been delineated in molecular detail. Using a rat cell culture model of HSC transdifferentiation, we analyzed TGF-beta signal transduction and identified changes between stellate cells and their transdifferentiated phenotype. Fully transdifferentiated myofibroblasts, opposed to HSCs, were not inhibited in proliferation activity on treatment with TGF-beta1. Furthermore, stimulation of alpha2 (I) collagen and Smad7 messenger RNA (mRNA) expression by TGF-beta1 was achieved in stellate cells but not in myofibroblasts. Northern and Western blot analyses indicated significant expression of TGF-beta receptors I and II in both cell types. In contrast, [(125)I]-TGF-beta1 receptor affinity labeling displayed strongly reduced types I, II, and III receptor presentation at the cell surface of myofibroblasts. Moreover, myofibroblasts did not display DNA-binding SMAD proteins in electrophoretic mobility shift assays with a CAGA box. These data indicate that stellate cells are responsive to TGF-beta1 treatment and transduce a signal that may play an important role in liver fibrogenesis. Myofibroblasts display decreased availability of surface receptors for TGF-beta, which could be based on autocrine stimulation. However, lack of activated SMAD complexes with DNA-binding activity and absence of alpha2 (I) collagen transcription inhibition by latency-associated peptide (LAP)/anti-TGF-beta antibody raise the possibility of TGF-beta signaling independent receptor down-regulation in myofibroblasts.