Inhibin-alpha-deficient mutant mice have been generated by a targeted deletion of the inhibin-alpha gene through homologous recombination in murine embryonic stem cells. Essentially all of the homozygous mutants develop gonadal sex cord-stromal tumors. To investigate their endocrine and proliferative characteristics, gonadal tumor cells were maintained in vitro. Cells from inhibin-alpha-deficient mice multiplied poorly; however, cells from mice deficient in both inhibin-alpha and p53 proliferated rapidly and showed higher saturation density and plating efficiency, thus allowing the establishment of clonal tumor cell lines. Although negligible estrogen and testosterone was produced by the clonal cells, high levels of progesterone were secreted. A clonal testis tumor cell line (inhibin-alpha/p53 deficient) showed no response to exogenous FSH, human CG (hCG), or inhibin A but exhibited a 6- to 8-fold increase in progesterone production in response to forskolin treatment. The stimulatory effect of forskolin was, however, partially blocked by activin treatment. Northern blot analysis revealed inhibin beta A and beta B mRNA expression in these cells. Furthermore, Western blot analyses indicated the secretion of the beta A-subunit protein. We further tested the role of activin on tumor cell growth. Treatment with follistatin, an activin-binding protein, inhibited tumor cell replication in a dose-dependent manner. In contrast, treatment with activin A stimulated tumor cell growth by itself and partially blocked follistatin action. Incorporation of thymidine into DNA of these cells was also stimulated by activin. In addition, treatment with antiactivin A serum inhibited tumor cell replication and blocked the stimulatory action of activin on cell growth. The activin action is likely mediated by specific receptors because cross-linking of activin to the 50-55 kilodalton type I and 75-80 kilodalton type II receptors was found using sodium dodecyl sulfate-polyacrylamide gel electrophoresis analysis. Northern blot analysis also revealed follistatin mRNA expression in the tumor cells, suggesting these cells are related to granulosa cells. Our findings indicate that activin can act as an autocrine growth factor in stimulating the proliferation of gonadal tumor cell lines derived from inhibin-alpha and p53-deficient mice and inhibits progesterone production. These tumor cell lines are useful for studies on the regulation of gonadal cell proliferation and steroidogenesis as well as the signaling pathway mediating activin action.