Transgenic mice overexpressing transforming growth factor alpha (TGF-alpha) under control of the metallothionein promoter had, on average, 20% reductions in body and carcass weights compared to nontransgenic littermates. This loss resulted from significant decreases in the comparative weights of bone, muscle, and especially fat. Transgenic epididymal fat pads were reduced by 40-80%, and total body fat content by 50%, relative to control animals. Distal hindlimb muscle weights were 20% below normal, and other skeletal muscles were visibly smaller in size. Weight reductions were accompanied by decreases in the cellularity of transgenic fat pads and muscles and by decreases in the number and area of striated muscle fibers. These findings were not obviously attributable to differences in metabolic rates since transgenic and control mice displayed similar levels of energy expenditure per unit lean body mass. The effects of TGF-alpha on the development of these tissues could be mimicked in culture for fat but not muscle. Thus, TGF-alpha did not inhibit the differentiation of the mouse skeletal myoblast cell line C2C12 as evidenced by the expression of muscle-specific actin and fusion to form multinucleated myotubes. However, TGF-alpha repressed the differentiation of the preadipocyte cell line 3T3-F442A in a dose-dependent and reversible manner as judged by morphological conversion and diminished expression of mRNAs encoding the adipocyte-specific markers adipsin and glycerophosphate dehydrogenase. This repression, which occurred without marked stimulation of proliferation, was incomplete even in the presence of high concentrations of growth factor. Despite its effects on adipose development, introduction of the metallothionein-TGF-alpha transgene into the ob/ob genetic background did not suppress the marked obesity characteristic of this mutation. Finally, endogenous TGF-alpha epidermal growth factor receptor mRNAs were detected in normal adipose tissue, suggesting that regulation of adipogenesis by this growth factor may be physiological.