The effects of transforming growth factor beta 1 or beta 2 (TGF-beta 1 or -beta 2) on the in vitro proliferation and differentiation of normal and malignant human hematopoietic cells were studied. Both forms of TGF-beta suppressed both the normal cellular proliferation and colony formation induced by recombinant human interleukin-3 (IL-3) and granulocyte-macrophage colony-stimulating factor (GM-CSF). In the presence of GM-CSF or IL-3, optimal concentrations of TGF-beta (400 pmol/L) inhibited colony formation by erythroid (BFU-E), multipotential (CFU-GEMM), and granulocyte-macrophage (CFU-GM) progenitor cells by 90% to 100%, whereas granulocyte or monocyte cluster formation was not inhibited. In contrast, neither form of TGF-beta had any effect on G-CSF-induced hematopoiesis. The suppressive action appeared to be mediated directly by TGF-beta since antiproliferative responses were also observed in accessory cell-depleted bone marrow cells. In contrast to normal bone marrow cells, both GM- and G-CSF-induced proliferation of cells from patients with chronic myelogenous leukemia were suppressed in a dose-dependent manner by TGF-beta. Differential effects of TGF-beta on the proliferation of established leukemic lines were also observed since most cell lines of myelomonocytic nature studied were strongly inhibited where erythroid cell lines were either insensitive or poorly inhibited by TGF-beta. These results suggest that TGF-beta is an important modulator of human hematopoiesis that selectively regulates the growth of less mature hematopoietic cell populations with a high proliferative capacity as opposed to more differentiated cells, which are not affected by TGF-beta.