Different ligands of tyrosine kinase receptors have neurotrophic or mitogenic effects in PC12 cells. NFG and FGF, which cause morphological differentiation, as well as EGF, that induces cell growth, produce a significant increase of TGF-beta1 transcripts in PC12 cells. Sequences responsible for the transcriptional effects of the growth factors are located in the 5'-flanking region of the TGF-beta1 gene. The TGF-beta1 gene has two promoters and the growth factors significantly enhance the activity of constructs containing either the first or the second promoter. A functional p21ras is required for the regulation of TGF-beta1 by ligands of tyrosine kinase receptors since expression of oncogenic ras in PC12 cells also increases TGF-beta1 transcripts, and a dominant inhibitory ras mutant blocks activation of TGF-beta1 gene expression by NGF. Oncogenic raf stimulates the activity of both promoters and a dominant negative raf also significantly inhibits growth factor activation. As determined by Mv1Lu cell proliferation inhibition assay, PC12 cells release a significant amount of TGF-beta1 in a latent form and incubation with growth factors or expression of oncogenic ras further increase TCF-beta1 production. These results suggest that during proliferation or growth factor-induced differentiation of sympathetic neurons there is an increase in TGF-beta1 that could be an important mediator of neural cells function.