Using recombinant DNA technology, we have generated Chinese hamster ovary (CHO) cell lines that synthesize latent transforming growth factor beta 1 (TGF-beta 1) to study immune regulation by TGF-beta 1. In vitro, latent TGF-beta 1 synthesized by transfectants or added exogenously as a purified complex after activation inhibited CTL generation to a similar extent as seen with acid-activated recombinant human (rHu) TGF-beta 1. In vivo, serum from nu/nu mice bearing CHO/TGF-beta 1 tumors contained significant levels of latent TGF-beta 1 in addition to depressed natural killer (NK) activity in spleens which paralleled that seen in C3H/HeJ mice treated with acid-activated rHuTGF-beta 1. rHuTGF-beta 1 treatment of mice receiving heart allografts resulted in significant enhancement of organ graft survival. Because of possible regulated tissue-specific activation, administration of latent rather than active TGF-beta may provide a better route to deliver this powerful immunosuppressive agent in vivo.