The effects of transforming growth factor β (TGF-β) on cell-to-cell communication were investigated in the log phase of growth in normal BE and in adenovirus-12 SV40 hybrid virus transformed BE cells (strain BEAS-2B). Gap junctions in these cells were identified immunocytochemically. Exposure of BE cells to exogenous TGF-β (0.04–4.0 pM) in serum-free keratinocyte growth medium (KGM) for 1 or 24 h reduced the rate of fluorescent dye transfer (i.e. cell-to-cell communication) by 30–50% in BE cells. Inversely, in BEAS–2B cells, TGF-β after 1 h induced a 2- to 10-fold increase in the rate of dye transfer. After 24 h of TGF-β, communication among BEAS-2B cells was not significantly different from controls (no exogenous TGF-β). The protein kinase C (PKC) inhibitor H-7 induced a dose-dependent enhancement in communication, which was even higher in the presence of TGF-β (4 pM × 24 h). The calmodulin antagonist W-7 enhanced communication in BEAS-2B cells independently of the presence of TGF-β. In keratinocyte basal medium (KBM) supplemented with EGF (5 ng/ml) or with TGF-β (4.0 pM) dye transfer was reduced or enhanced respectively. The combination of EGF and TGF-β in KBM antagonized the stimulatory effect of the latter on communication in BEAS-2B cells. In BE cells, continuous exposure (4 days) to TGF-β in KGM induced a dose-dependent inhibition of proliferation and an increased expression of a keratinized, epidermoid phenotype. This correlated with a reduction in the expression of a mucous secretory phenotype. Increased exposure to TGF-β (0.04–4.0 pM) decreased the labeling index in BEAS-2B cells, but the cells retained a growth advantage over normal BE cells, and did not express a keratinized epidermoid morphology. With respect to dye transfer as an index of cell-to-cell communication, we conclude (i) that an inhibition or enhancement of communication is involved in the response of bronchial epithelial cells to mitogens (e.g. epidermal growth factor) or growth inhibitors (e.g. TGF-β), (ii) that PKC and Ca2+-calmodulin-dependent processes regulate dye transfer, and (iii) the effects of TGF-β are mediated by PKC.