The effect of transforming growth factor-beta (TGF-beta) on induction of differentiation of mouse myeloid leukemia M1 cells was investigated. TGF-beta 1 induced adherence of M1 cells to plastic dishes and inhibited their proliferation. However, it did not induce differentiation-associated properties, such as phagocytic activity, lysozyme activity or morphological maturation. TGF-beta 1 also caused dose-dependent inhibition of dexamethasone-induced differentiation of M1 cells. The inhibitory activity of TGF-beta 1 was 20 times that of TGF-beta 2 on M1 cells. These results suggest that TGF-beta 1 inhibits proliferation and dexamethasone-induced differentiation of M1 cells by interacting with receptors that can distinguish between TGF-beta 1 and TGF-beta 2. TGF-beta 1 had a much lower inhibitory effect on the growth of a variant M1 cell clone, which was resistant to differentiation inducers, and it did not induce adherence of the resistant M1 cells.