We compared the ability of Epidermal Growth Factor (EGF) and Transforming Growth Factor alpha (TGF alpha) to transduce a mitogenic signal via their common receptor, the EGF receptor, in primary cultures of fetal rat hepatocytes. Mitogenic potency, measured as DNA synthesis, was similar in response to EGF and TGF alpha although signal initiation, measured as EGF receptor tyrosine phosphorylation, was more than 3-fold higher in response to EGF compared to TGF alpha. Downstream signal transduction events including Shc tyrosine phosphorylation, Shc/Grb2 complex formation and MAP kinase activation were similar in response to EGF and TGF alpha, thus indicating a dissociation between potency for receptor activation versus signal propagation. These data suggest that TGF alpha may preferentially activate an EGF receptor population linked to the Ras/MAP kinase pathway. In contrast, EGF shows no such selectivity, thereby reducing the mitogenic potency of EGF relative to its ability to activate the EGF receptor.