TGFbeta1 plays an important role in the growth of the prostate and has been reported to stimulate or inhibit the proliferation of prostatic epithelia. We show here that Tgfbeta1, Tgfbeta2, and Tgfbeta3 mRNA expression correlated with developmental growth of the prostate. Recombinant TGFbeta1 inhibited the growth of the prostate when added to cultures of ventral prostate (VP) organs grown in vitro. Interestingly, TGFbeta1 had contrasting effects on cellular proliferation; it stimulated proliferation at the periphery of the organs (distal to urethra), but inhibited proliferation in the center of the organs (proximal to urethra). We speculate that differential effects on proliferation may be determined by the level of cellular differentiation, because cells at the periphery are undifferentiated whereas those in the center are more highly differentiated. TGFbeta1 also stimulated branching morphogenesis at growing ductal tips at the perimeter of the VP. To investigate potential mechanisms of TGFbeta1 action, we examined the three-dimensional distribution of smooth muscle in prostatic organs after treatment with TGFbeta1. TGFbeta1 showed a significant effect on the distribution of smooth muscle within VPs, which may mediate part of its effect on proliferation. Finally, we addressed how testosterone and TGFbeta1 might affect gene expression in our developmental system. Testosterone repressed the expression of Tgfbeta2 mRNA in the prostate, whereas TGFbeta1 showed a modest repression of fibroblast growth factor-10 mRNA. It appeared that the effects of these factors were more pronounced in a model of prostatic mesenchyme devoid of epithelia than in prostatic organs (containing epithelia).