Transforming growth factor-beta (TGF-beta) is a bifunctional growth regulator. It inhibits growth of many cell types, including epithelial cells, but stimulates growth of others (e.g. fibroblasts). The active site on the TGF-beta molecule, which mediates its growth regulatory activity, has not been defined. Here, we show that antibody to a TGF-beta(1) peptide containing the motif WSLD (52nd to 55th amino acid residues) completely blocked both I-125-TGF-beta(1) binding to TGF-beta receptors and TGF-beta(1)-induced growth inhibition in mink lung epithelial cells. Site-directed mutagenesis analysis revealed that the replacement of Trp(52) and Asp(55) by alanine residues diminished the growth inhibitory activity of TGF-beta(1) by similar to 90%, Finally, while wild-type TGF-beta(1) was able to stimulate growth of transfected NIH 3T3 cells, the double mutant TGF-beta(1) W52A/D55A was much less active. These results support the hypothesis that the WSLD motif is an active site of TGF-beta(1), which is important for growth inhibition of epithelial cells and growth stimulation of fibroblasts.