The effect of transforming growth factor-beta (TGF-beta) on proliferation and differentiation of mouse clonal osteoblastic cells (MC3T3-E1) was examined in vitro in three different stages of their differentiation. Stage I (1-3 days after plating) was characterized by rapid cell growth, negligible alkaline phosphatase (ALP) activity and high proteoglycan synthesis, but low collagen production. In stage II (3-5 days after plating), proteoglycan synthesis sharply decreased and ALP activity and collagen synthesis began to increase. Stage III (7-9 days after plating) was characterized by maximal osteoblastic phenotypes. Treating MC3T3-E1 cells with 1 ng/ml of TGF-beta greatly inhibited DNA synthesis in stage I but not in stage II. In contrast, TGF-beta dose-dependently stimulated the synthesis of collagenase digestible proteins (CDP), noncollagenous proteins (NCP) and proteoglycan, especially in stage II. The minimum effective dose of TGF-beta in this stage was as low as 0.04-0.2 ng/ml. In stages I and III, the MC3T3-E1 cells were rather insensitive to TGF-beta in increasing three osteoblastic phenotypes. The increase in ALP activity in stages II and III was inhibited by 1 ng/ml of TGF-beta. These results indicate that the response to TGF-beta of mouse clonal osteoblastic MC3T3-E1 cells changes depending on their maturation stages.