The beta-type transforming growth factors (TGF beta) are potent inhibitors of cell proliferation. The mechanisms of TGF beta growth inhibition have been investigated. In skin keratinocytes, TGF beta 1 rapidly suppresses c-myc expression at the level of transcriptional initiation, and expression of c-myc was shown to be necessary for proliferation of these cells. Overexpression of c-myc, using an inducible construct, blocks growth inhibition by TGF beta 1. In 11.5 day p.c. lung bud organ cultures, TGF beta 1 inhibits tracheobronchial epithelial development, including branching morphogenesis. At this stage of development, the tracheobronchial epithelia express N-myc, but not c-myc, TGF beta 1 was shown to markedly inhibit N-myc expression in epithelia of the lung bud organ cultures. N-myc gene knockout experiments by others have shown that N-myc is required for branching morphogenesis of the tracheobronchial tree. The data indicate that suppression of expression of either N-myc or c-myc may play a role in TGF beta growth inhibition. To study the role of TGF beta 1 in normal mammary development and in mammary neoplasia, we have constructed three transgenic mouse lines that express a simian TGF beta 1S223/225 mutated to produce a constitutively active product under the control of the MMTV enhancer/promoter. Expression of the transgene was associated with marked suppression of the normal pattern of mammary ductal tree development in female transgenics from all three lines. However, during pregnancy, alveolar outgrowths developed from the hypoplastic ductal tree, and lactation occurred. Unlike many other transgenic mouse models in which expression of TGF alpha or oncogenes under control of the MMTV promoter leads to mammary epithelial hyperplasia and increased tumor formation, the MMTV-TGF beta 1 transgene causes conditional hypoplasia of the mammary ductal tree. No spontaneous tumors have been detected in the MMTV-TGF beta 1 transgenic animals, indicating that overexpression of TGF beta 1 in mammary epithelia does not enhance, and may actually suppress, early stages of carcinoma development. Other studies have shown that overexpression of TGF beta 1 in carcinoma cells enhances tumorigenicity and metastatic spread. We propose that TGF beta has a bifunctional role in carcinogenesis, retarding carcinoma development but enhancing progression once neoplastic transformation has occurred and the growth inhibitory response to TGF beta has been lost.