Transforming growth factor alpha (TGF-alpha) has multifunctional biological effects on a variety of mesenchymal and epithelial cells. It is a potent mitogen for a number of normal and transformed cell types, regulates extracellular matrix (ECM) production and promotes breast, kidney and lung morphogenesis. To clarify the role of ECM proteins in the morphogenetic and mitogenic effects of TGF-alpha, we have used a human colon carcinoma cell line (SW1222) which expresses EGF receptor. Here we show that TGF-alpha at 1 ng/ml increases the proliferation of SW1222 cells, but only when they are cultured on plastic rather than collagen-coated plates. Higher concentrations of TGF-alpha (10 ng/ml) did not increase cell proliferation but significantly enhanced the crypt-like glandular differentiation when cells were grown in 3-dimensional collagen gel (p = 0.027). These effects were accompanied by increased expression of alpha 2 beta 1 and alpha 3 beta 1 integrin molecules, which are receptors for extracellular matrix proteins, and by a statistically significant increase in binding of SW1222 cells to type-1 collagen. The effects of TGF-alpha both on binding to type-1 collagen and on morphological differentiation in 3-dimensional collagen gel were inhibited by monoclonal antibodies recognizing the alpha 2 beta 1 integrin. These data indicate that the morphogenetic or mitogenic activities of TGF-alpha are critically dependent on cellular interactions with extracellular matrix proteins and are primarily mediated by the alpha 2 beta 1 integrin receptor. Inappropriate expression of this growth factor, seen in tumours whose cell-matrix interactions are greatly impaired, could have deleterious effects on the maintenance of normal tissue architecture and growth control.