With subpopulations of human lymphoid cells that were enriched for lymphokine-activated killer (LAK) cell precursors, studies were performed to examine the effects of transforming growth factor-beta (TGF-beta) on their IL-2-dependent growth and differentiation to killer cells. The majority of the LAK precursor cells appeared to reside in nonadherent, non-T, and non-B lymphocyte populations that expressed CD11 and CD16 Ag. These cells were induced to proliferate and become LAK cells by high concentrations of rIL-2 alone in the apparent absence of any prior activation with mitogen or Ag. The partially purified lymphocyte subpopulations generated varying but several-fold greater levels of LAK killing on a per cell basis than did unfractionated lymphocytes. The exogenous addition of TGF-beta to the LAK precursor cultures, markedly inhibited IL-2-stimulated growth as well as the development of LAK activity in a dose-dependent manner. The antimitotic effect of TGF-beta was reversible; inhibition of proliferation could be largely restored by increasing the concentration of IL-2 in culture. In contrast, TGF-beta inhibition of cytotoxicity was relatively independent of the concentration of IL-2. Further, LAK precursors constitutively expressed TGF-beta mRNA and high affinity receptor for TGF-beta. Activation of LAK precursors with IL-2 alone, resulted in a three- to fivefold up-regulation of intracellular TGF-beta mRNA and TGF-beta biologic activity secreted in the culture media. Furthermore, Northern blotting revealed that the resting LAK precursors did not express the Tac-mRNA. Receptor binding studies with 125I-IL-2 suggested the presence of a single class of IL-2R with an apparent Kd of intermediate range (beta-chain of IL-2R) on the unstimulated cells. Stimulation with high concentrations of Il-2 induced Tac-mRNA (both the 3.5- and 1.5-kb transcripts) and resulted in the expression of high affinity IL-2R (Kd approximately 10(-11) M) on these cells. Suppression of IL-2-dependent responses by TGF-beta was accompanied by a selective down-regulation of the 1.5-kb Tac-mRNA as well as by reduction in high affinity IL-2R. The results suggest a negative autocrine control of TGF-beta on IL-2-dependent growth and differentiation of human LAK cells, possibly related to regulate the killer activation function.