The goal of our research was to determine the effects of TGF beta on differentiation and growth of normal and malignant breast epithelial cells. The influence of TGF beta on differentiation was studied in a series of normal, immortalized, and oncogene-transformed human mammary epithelial cells. The expression of human milk fat globule antigen as differentiation marker was increased ten- to fifteenfold in normal cells and two to threefold in transformed cells after treatment with 200 pM TGF beta for 30 h. All cell lines except one were growth inhibited by TGF beta. Using the estrogen receptor-positive breast cancer cell lines MCF7, ZR-75-1, T-47D, and the estrogen receptor-negative lines MDA-MB-231, SK-BR-3, Hs578T, MDA-MB-468, we found that all tested cell lines except late passage (greater than 500) MCF7 cells were growth inhibited by TGF beta 1 as well as TGF beta 2. The maximal inhibition was 50% in estrogen receptor-positive and 80% in estrogen receptor-negative cell lines at concentrations of 800 and 40 pM, respectively in an anchorage-independent growth assay. All tested breast cancer cell lines secreted a TGF beta-like activity, the production of which was stimulated in MCF7 cells treated with antiestrogens and which inhibited the anchorage-independent growth of MDA-MB-231 cells. These observations suggest that the malignant phenotype in breast cancer need not be coupled with resistance to effects of TGF beta on growth and differentiation. Breast cancer cells being resistant to treatment with antiestrogens are still growth inhibited by TGF beta in vitro. This may partially explain the growth inhibitory effects of antiestrogens in mixtures of estrogen receptor-positive and -negative tumor cell populations in vivo.