Transforming growth factor-beta1 (TGF-beta 1) may be a critical mediator of lung injury and subsequent remodeling during recovery. We evaluated the effects of TGF-beta 1 on the permeability and active ion transport properties of alveolar epithelial cell monolayers. Rat alveolar type II cells plated on polycarbonate filters in defined serum-free medium form confluent monolayers and acquire the phenotypic characteristics of alveolar type I cells. Exposure to TGF-beta 1 (0.1-100 pM) from day 0 resulted in a concentration- and time-dependent decrease in transepithelial resistance (Rt) and increase in short-circuit current (Isc). Apical amiloride or basolateral ouabain on day 6 inhibited Isc by 80 and 100%, respectively. Concurrent increases in expression of Na+-K+-ATPase alpha 1- and beta 1-subunits were observed in TGF-beta 1-treated monolayers. No change in the alpha-subunit of the rat epithelial sodium channel (alpha-rENaC) was seen. Exposure of confluent monolayers to TGF-beta 1 from day 4 resulted in an initial decrease in Rt within 6 h, followed by an increase in Isc over 72-96 h. These results demonstrate that TGF-beta 1 modulates ion conductance and active transport characteristics of the alveolar epithelium, associated with increased Na+-K+-ATPase, but without a change in alpha-rENaC.