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The local production and action of an epidermal growth factor (EGF)-like substance within the seminiferous tubule was investigated as a potential mediator of cell-cell interactions. Peritubular (myoid) and Sertoli cells were isolated and cultured under serum-free conditions. Proteins secreted by Sertoli and peritubular cells were found to contain a component that bound to the EGF receptor in a RRA. Separation of secreted proteins by reverse phase chromatography fractionated a protein that contained EGF bioactivity in its activity to stimulate growth of an EGF-dependent cell line. Biochemical properties examined for both Sertoli and peritubular cell EGF activities were similar with each other, but distinct from murine EGF. Northern blot analysis with an EGF cDNA probe did not detect EGF gene expression in peritubular, Sertoli, or germ cells. The possible production of an EGF-like substance such as transforming growth factor-alpha (TGF alpha) was investigated with a molecular probe to human TGF alpha. Both peritubular and Sertoli cells contained a 4.5-kilobase mRNA species that hybridized in a Northern blot analysis with a human TGF alpha cRNA probe. An immunoblot with a TGF alpha antisera confirmed the production of TGF alpha by the detection of a protein in both Sertoli and peritubular cell secreted proteins. TGF alpha gene expression was not detected in freshly isolated germ cells. Scatchard analysis revealed the presence of high affinity EGF receptors on peritubular cells and the absence of such receptors on Sertoli or germ cells. TGF alpha was found to stimulate peritubular cell proliferation, but had no effect on Sertoli cell growth. The effects of hormones and TGF alpha on Sertoli cell function and differentiation were assayed through an examination of transferrin production by Sertoli cells. TGF alpha had no direct effect on transferrin production or the ability of hormones to influence Sertoli cells. However, the presence of peritubular cells in coculture with Sertoli cells allowed TGF alpha to stimulate transferrin production. TGF alpha was also found to have relatively rapid effects on peritubular cell migration and the promotion of colony formation in culture. Cocultures of peritubular and Sertoli cells also responded to TGF alpha by the formation of large clusters of cells. Observations demonstrate the local production of TGF alpha by Sertoli and peritubular cells, and action of TGF alpha on peritubular cells and, potentially, Sertoli cells. The local production and action of TGF alpha may have a critical role as a paracrine/autocrine factor involved in the maintenance of testicular function.