To evaluate the role of transforming growth factor alpha (TGF alpha) in transformed rat thyroid epithelial cells, expression and production of TGF alpha were measured in a normal rat thyroid epithelial cell line, FRTL-5, and in the same cells transformed by the Ki-ras oncogene. FRTL-5 cells transformed with Ki-ras exhibit a 5- to 7-fold increase in the levels of TGF alpha-specific mRNA and a 3- to 4-fold enhancement of the amounts of TGF alpha protein in the conditioned medium, as compared with the normal thyroid cells. Although conditioned medium from the Ki-ras transformed FRTL-5 cells or authentic epidermal growth factor or TGF alpha are able to stimulate the anchorage-dependent growth of nontransformed FRTL-5 cells, neither conditioned medium nor the growth factors are able to induce the anchorage-independent growth of these cells in soft agar. FRTL-5 cells were then transfected with an expression vector plasmid containing the human TGF alpha cDNA to directly ascertain if over-expression of this growth factor is able to induce transformation in these cells. The TGF alpha-transfected FRTL-5 clones constitutively produced high amounts of TGF alpha at a level equivalent to or greater than the level found in the conditioned medium from the Ki-ras transformed FRTL-5 clones. Moreover, in contrast to the Ki-ras transformed cells, the TGF alpha transfectants were unable to grow in soft agar, did not form tumors in nude mice, and showed no reduction in the secretion of thyroglobulin. These data demonstrate that unlike Ki-ras, the constitutive expression of biologically active TGF alpha is not entirely sufficient to elicit a transformed phenotype in these cells.