The potential role of transforming growth factor beta (TGF beta) as a mediator of cell-cell interactions within the seminiferous tubule was investigated through an examination of the local production and action of TGF beta. Sertoli cells and peritubular (myoid) cells were isolated and cultured under serum-free conditions. Secreted proteins from Sertoli cells and peritubular cells were found to contain a component that bound to TGF beta receptors in RRA. Reverse-phase chromatography of Sertoli cell and peritubular cell secreted proteins fractionated a protein with similar biochemical properties as TGF beta 1. This fractionated protein also contained TGF beta bioactivity in its ability to inhibit growth of an epidermal growth factor-dependent cell line. Both peritubular cells and Sertoli cells contained a 2.4 kilobase mRNA species that hybridized in a Northern blot analysis with a TGF beta 1 cDNA probe. TGF beta 1 gene expression was not detected in freshly isolated germ cells. TGF beta 1 alone was not found to influence Sertoli cell nor peritubular cell proliferation with cells isolated from a midpubertal stage of development. The effects of hormones and TGF beta on Sertoli cell differentiation and function were assessed through an examination of transferrin production by Sertoli cells. TGF beta 1 had no effect on transferrin production nor the ability of hormones to influence transferrin production. The presence of peritubular cells in a coculture with Sertoli cells also did not affect the inability of TGF beta 1 to act on Sertoli cells. Although Sertoli cell function did not appear to be influenced by TGF beta 1, peritubular cells responded to TGF beta 1 through an increase in the production of a number of radiolabeled secreted proteins. TGF beta 1 also had relatively rapid effects on peritubular cell migration and the promotion of colony formation in culture. Cocultures of Sertoli cells and peritubular cells responded to TGF beta 1 by the formation of large cell clusters with ball-like structures. Data indicate that TGF beta may have an important role in influencing the differentiation and migration of peritubular cells. Observations demonstrate the local production of TGF beta within the seminiferous tubule by Sertoli cells and peritubular cells and suggest that TGF beta may have a role as a paracrine-autocrine factor involved in the maintenance of testicular function.