Skeletal muscle satellite cells were cultured from mature rats and were treated in vitro with transforming growth factor-beta (TGF-beta). Muscle-specific protein synthesis and satellite cell fusion were used as indicators of muscle differentiation; a dose-dependent inhibition of differentiation was observed in response to TGF-beta. In addition, TGF-beta depressed cell proliferation in a dose-dependent manner. Half-maximal inhibition of differentiation was seen with a TGF-beta concentration of approximately 0.1 ng/ml. Although proliferation was not inhibited, it was depressed and half-maximal suppression of proliferation occurred in response to 0.1–0.5 ng TGF-beta/ml. Neonatal rat myoblasts were also subjected to TGF-beta treatment, and similar results were observed. Neonatal cells, however, were more sensitive to TGF-beta than satellite cells, as indicated by the reduced concentrations of TGF-beta required to inhibit differentiation and reduce the rate of proliferation. Under identical culture conditions proliferation of muscle-derived fibroblasts were also depressed. The differentiation inhibiting effect of TGF-beta on satellite cells was reversible. It has been suggested that TGF-beta could be an important regulator of tissue repair, and its in vitro effects on satellite cells suggest a possible role in regulation of muscle regeneration.