BALB/MK (MK) is a continuous murine keratinocyte line whose cells are strictly dependent on exogenous epidermal growth factor (EGF) for growth in culture. A derivative cell, KC, resulted from Kirsten murine sarcoma virus transformation, and these cells no longer require EGF for their growth. Despite differences in MK and KC growth conditions, both cell lines are growth inhibited by picomolar concentrations of transforming growth factor-beta (TGF-beta). When MK and KC cells were maintained in the presence of TGF-beta, resistant variants eventually proliferated only from the KC population. In an attempt to determine the mechanism of development of TGF-beta resistance, the TGF-beta-resistant cells (KCR cells) were compared with TGF-beta-sensitive KC cells with regard to growth properties, TGF-beta 1 binding characteristics, and gene expression. KCR cells continued to synthesize DNA and proliferated in the presence of TGF-beta 1 concentrations up to 2 nM, which was 500-fold greater than the ED50 for the sensitive cells. Although the KCR cells possess similar receptor numbers and affinity for TGF-beta 1, we observed differences in affinity cross-linking studies. The KCR cells expressed more of the type III, high molecular weight cell surface binding protein and less of the type II than the KC cells. The type I moiety was clearly altered to a smaller size in some, but not all, KCR cells. In gene regulation studies, there was no apparent difference in c-Ki-ras and v-Ki-ras mRNA levels in the KC and KCR cells. Additionally, expression of TGF-alpha and TGF-beta 1 mRNA was similar in MK, KC, and KCR cells. The expression of proliferation-associated genes, such as c-myc and MGSA/c-gro/kc, which were markedly decreased by TGF-beta 1 in the MK and KC cells, was not altered by TGF-beta 1 in the KCR cells. The data suggest that the loss of TGF-beta 1 responsiveness in the KCR cells was due to an alteration in the TGF-beta receptor that did not permit signal transduction, although the existence of postreceptor alterations cannot be excluded.