Transforming growth factor-beta (TGF-beta) is a potent regulator of cell proliferation and modulates the interactions of cells with their extracellular matrix (ECM), in part by inducing the synthesis of various ECM proteins. Three different isoforms of TGF-beta are synthesized in a defined pattern in specific cell populations in vivo. In the specific case of TGF-beta 1, this well-defined and limited expression stands in sharp contrast to its synthesis by virtually all cells in culture. Using mammary epithelial cells as a model system, we evaluated the substratum dependence of the expression of TGF-beta 1. The level of TGF-beta 1 expression is high in cells on plastic, but is strongly downregulated when cells are cultured on a reconstituted basement membrane matrix. In contrast, TGF-beta 2 mRNA levels in cells on either substratum remain unchanged. Using the chloramphenicol acetyl transferase gene as reporter gene under the control of the TGF-beta 1 promoter, we show that transcription from this promoter is suppressed when the cells are in contact with either endogenously synthesized or exogenously administered basement membrane. TGF-beta 1 promoter activity is strongly induced by the absence of basement membrane, i.e., by direct contact of the cells with plastic. This modulation of transcription from the TGF-beta 1 promoter occurs in the absence of lactogenic hormones which allow full differentiation. Our results thus indicate that basement membrane is an important regulator of TGF-beta 1 synthesis, and explain why most cells in culture on plastic express TGF-beta 1 in contrast with the more restricted TGF-beta 1 synthesis in vivo. We propose that there is a feedback loop whereby TGF-beta 1-induced synthesis of basement membrane components is repressed once a functional basement membrane is present. Finally, these results together with our current knowledge of regulation of TGF-beta 1 and TGF-beta 2 synthesis, suggest that, in vivo, TGF-beta 1 may play a major role in regulating the ECM synthesis and the cell-ECM interactions, whereas TGF-beta 2 may be more important in morphogenetic processes.