The effect of transforming growth factor beta (TGF-beta) on morphology, actin cytoskeleton organization, anchorage-dependent proliferation, anchorage-independent proliferation, and alpha-fetoprotein secretion in a series of related hepatocyte-derived cell lines was measured. We reported previously that TGF-beta 1 partially suppressed the transformed phenotype of a ras- transformed SV40-immortalized hepatocyte cell line designated NR4. In the present study, the CWSV14 cell line, which was derived by transfecting rat hepatocytes with SV40 DNA, was analyzed at low (14LP), mid (14MP), and high (14HP) passage. CWSV14 cells are weakly tumorigenic at low passage and spontaneously transform with in vitro passaging. Tumor cell lines (14T1 and 14T2) derived from hepatocellular carcinomas produced by CWSV14 cells were also analyzed. TGF-beta 1 partially suppressed the transformed phenotype of 14HP, 14T1 and 14T2 cells but had no effect on cell proliferation in these cells. In contrast, TGF-beta 1 induced apoptosis in 14LP and 14MP cells. Studies using both the NR4 and 14T1 cells showed that suppression of the transformed phenotype also could be induced by TGF-beta 2 or TGF-beta 3. We conclude that TGF-beta-induced suppression of the transformed phenotype can be observed in ras-and spontaneously transformed hepatocyte cell lines. It is also apparent that the effect of TGF-beta 1 on hepatocyte cell lines differs depending upon the state of progression toward malignancy; that is, while TGF-beta 1 suppressed the transformed phenotype in highly transformed and tumor cell lines representing late stages in progression, it induced apoptosis in weakly or moderately transformed cell lines representing early stages in progression.