Transient transfection of simian COS cells with a recombinant plasmid encoding the human transforming growth factor TGF-beta 2 precursor protein results in the production of a latent, biologically inactive protein. Upon acidification, recombinant TGF-beta 2 exhibits full biological activity, including inhibition of mink lung epithelial cell growth, stimulation of anchorage-independent growth of murine embryonic fibroblasts, and competition for TGF-beta receptor binding. Further analysis of conditioned media with antiserum to either a pro- [amino acid (aa) residues 1-220] or mature [aa 297-414] peptide of the TGF-beta 2 precursor suggests that TGF-beta 2, similar to TGF-beta 1 production in Chinese hamster ovary cells [Gentry et al., Mol. Cell. Biol. 7 (1987) 3418-3427], is initially synthesized as a larger precursor protein which is proteolytically cleaved to yield the mature 112-aa transforming growth factor.