We have examined both how the molecular phenotype of Schwann cells in vitro is regulated by transforming growth factor beta (TGF-beta), using immunohistochemistry and immunoblotting, and the distribution of TGF-beta 2 and 3 in embryonic and mature nerves and ganglia, using immunohistochemistry and in situ hybridisation. We find that TGF-beta 2 and -3 upregulate expression of the neural cell adhesion molecules NCAM and L1. In TGF-beta-treated cultures, in addition to the 140 and 120 kD isoforms known to be present in Schwann cells, small amounts of the 180 kD isoform can be detected. TGF-beta s also block cAMP-induced expression of the lipid antigens galactocerebroside (GalC) and O4, in addition to blocking expression of protein zero (P0), the major peripheral myelin glycoprotein, as previously shown. Using antibodies specific to TGF-beta 2 and -3, respectively, we confirm the presence of these proteins in myelin-forming Schwann cells and show also that TGF-beta 2 and -3 are clearly expressed by peripheral glia that are not involved in myelination. This includes Schwann cell precursors, embryonic Schwann cells, non-myelin-forming Schwann cells and satellite cells from adult nerves and ganglia, and neonatal Schwann cells in purified cultures without neurones. In situ hybridisation with a digoxygenin-labelled riboprobe reveals a strong TGF-beta 3 mRNA signal in Schwann cells, satellite cells, and some neurones. Schwann cells in culture also secrete TGF-beta in a latent form, whereas purified cultures of dorsal root ganglion neurones from 1-day-old rats secrete active TGF beta during the first 48 h in culture.