Transforming growth factor-beta (TGF-beta) is the prototypic member of a large family of structurally related proteins. Three vertebrate TGF-beta isoforms have been identified and termed TGF-beta1, TGF-beta2, and TGF-beta3, respectively. In addition, two receptors of the serine/threonine kinase family termed type I and II have also been identified. In this review, we focused our attention on the effects of TGF-beta on vascular development and vascular reactivity. The critical role of the TGF-beta1 and the TGF-beta type II receptor in blood vessel formation in the yolk sac has been demonstrated by gene deletion experiments. Recent investigations have also shown that isoforms of TGF-beta play a critical role in smooth muscle cell differentiation. And, finally, a role for TGF-beta1 in the regulation of vascular tone and reactivity has been suggested by studies demonstrating that TGF-beta1 can inhibit the production of potent vasodilators (such as nitric oxide) and stimulate the production of potent vasoconstrictors (such as endothelin). Taken together, these studies suggest that TGF-beta plays a critical role in blood vessel development and vascular function.