Growth of rat liver epithelial cells (RLEC) and primary cultures of parenchymal hepatocytes is potently inhibited by TGF-beta. Transfection of a mutated Ha-ras oncogene, but not a human c-myc oncogene, into RLEC resulted in cell lines resistant to growth inhibition by TGF-beta under anchorage-dependent conditions. Infection of primary rat hepatocyte cultures with v-Ha-ras yielded a cell line likewise insensitive to inhibition by TGF-beta. Binding of [125I]TGF-beta to Ha-ras-transfected RLEC was reduced relative to control or c-myc-transfected cells. These data suggest that activation of a Ha-ras oncogene in epithelial cells may result in escape from negative growth control and hence be a critical step during carcinogenesis. However, although Ha-ras induced resistance to growth inhibition by TGF-beta under anchorage-dependent conditions, TGF-beta inhibited the spontaneous growth in soft agar of all cell lines containing the Ha-ras oncogene. This may reflect an alteration in regulation of extracellular matrix proteins and related enzymes responsible for anchorage-independent growth.