Transforming growth factor β (TGF-β), a potent fibrogenic cytokine, is secreted in latent form. We examined which cell type in both normal and carbon tetrachloride (CCl4)-induced fibrotic rat liver bears surface type II IGF/mannose 6-phosphate (IGF-II/M6P) receptor, known to facilitate activation of TGF-β. In addition, the role of the IGF-II/M6P receptor in activation of latent TGF-β was investigated in a coculture system with sinusoidal endothelial cells. Northern hybridization analysis for IGF-II/M6P receptor messenger RNA (mRNA) was performed on total RNA of different isolated and purified liver cell types. In normal liver, cells expressed little IGF-II/M6P receptor mRNA. In fibrotic liver, we found significant expression only in fat-storing cells. The presence of IGF-II/M6P receptors was established by [125I]IGF-II binding assays on freshly isolated fat-storing cells from normal and CCl4-exposed rat livers. We found specific binding of [125I]IGF-II only on CCl4 exposed fat-storing cells. As determined by polyacrylamide gel electrophoresis after affinity labeling, the specific binding involved 220 kD type II IGF receptors. Scatchard analysis revealed the presence of 3,043 ± 1,378 IGF-II/M6P high-affinity receptors/fat-storing cell, with a Kd of 387 ± 165 pmol/L. With a mink lung epithelial cell (Mv1Lu) proliferation inhibition assay, inhibition of proliferation (a measure of active TGF-β function) was determined using conditioned media of activated fat-storing cells, cocultures of fat-storing cells, and endothelial cells and pure endothelial cell cultures. We found that conditioned media of cocultures of fat-storing cells and endothelial cells inhibits the growth of Mv1Lu cells more strongly than conditioned media of homotypic cultures. Addition of neutralizing anti-TGF-β antibodies neutralizes this effect. The contribution of IGF-II/M6P receptors on the cell membrane of activated fat-storing cells to the activation of latent TGF-β was demonstrated by incubating the cells with M6P, or antibodies directed to the IGF-II/M6P receptor, both of which diminishes activation of TGF-β. We conclude that IGF-II/M6P receptors are present on activated fat-storing cells and that the presence of this receptor at the cell surface is necessary, but not sufficient, for activation of latent TGF-β. Other factors, derived from endothelial cells, are involved.