Type-beta transforming growth factors (TGF-beta s) are polypeptides that act hormonally to control proliferation and differentiation of many cell types. Two distinct homodimeric TGF-beta polypeptides, TGF-beta 1 and TGF-beta 2 have been identified which show approximately 70% amino-acid sequence similarity. Despite their structural differences, TGF-beta 1 and TGF-beta 2 are equally potent at inhibiting epithelial cell proliferation and adipogenic differentiation. The recent immunohistochemical localization of high levels of TGF-beta in the bone marrow and haematopoietic progenitors of the fetal liver has raised the possibility that TGF-beta s might be involved in the regulation of haematopoiesis. Here we show that TGF-beta 1, but not TGF-beta 2, is a potent inhibitor of haematopoietic progenitor cell proliferation. TGF-beta 1 inhibited colony formation by murine factor-dependent haematopoietic progenitor cells in response to interleukin-3 (IL-3) or granulocyte-macrophage colony stimulating factor (GM-CSF), as well as colony formation by marrow progenitor cells responding to CSF-1 (M-CSF). The progenitor cell lines examined were approximately 100-fold more sensitive to TGF-beta 1 than TGF-beta 2, and displayed type-I TGF-beta receptors with affinity approximately 20-fold higher for TGF-beta 1 than TGF-beta 2. These results identify TGF-beta 1 as a novel regulator of haematopoiesis that acts through type-I TGF-beta receptors to modulate proliferation of progenitor cells in response to haematopoietic growth factors.