The progressive changes that occur as human epithelial cells transform to malignancy involve derangements in the normal processes of cellular proliferation and differentiation. These changes manifest in altered cell-cell and cell-basement membrane interactions. Since it is impossible to examine these events systematically as they occur in vivo, development of in vitro cell systems that can as accurately as possible reflect the in vivo state offer the next best alternative for determining the molecular mechanisms underlying human carcinogenesis. We have developed a human mammary epithelial cell system that permits long term growth of normal finite lifespan cells in a serum free medium. These cells have been transformed in vitro to immortality and malignancy. We have shown that signal transduction of the EGF receptor is essential for the normal HMEC to maintain growth. Blockage of this signal leads to a G0 arrest, and reversal of this blockage leads to a synchronous re-entry into the cell cycle. Transforming growth factor beta is a potent inhibitor of normal HMEC growth, but the transformed cell lines are capable of escaping TGFB growth inhibition while retaining physiological responses such as synthesis of extracellular matrix components. This cell system is being used to examine the differences between normal and transformed cells in expression of cell cycle and differentiation related properties. Further improvements in the cell culture system will facilitate studies on the interrelation between differentiation and carcinogenesis.