Members of the transforming growth factor beta (TGF-beta) family of polypeptides were found to be potent in vitro inhibitors of kappa light chain expression on normal bone marrow-derived and transformed cloned pre-B cells, and of the maturation of these cells to mitogen responsiveness. The inhibition by TGF-beta was selective in that Ia expression was not blocked. Together with the observations that LPS, IL-1, NZB serum factors, IL-4, and IFN-gamma preferentially induced either kappa or Ia, or both, on a pre-B cell line, these results further suggest that acquisition of Ig and class II molecules is independently controlled by different antagonists as well as agonists. In addition, kappa chain induction by IFN-gamma does not appear to be as sensitive to TGF-beta downregulation as that stimulated by other factors tested, and this raises the possibility that activation of the same gene may result from different transmembrane signaling pathways. In contrast to the inhibitory effects of TGF-beta on kappa acquisition by pre-B cells and on kappa increase after exposure of mature B cells to LPS, as measured by kappa RNA levels and/or surface fluorescence, no inhibition was observed on unstimulated spleen B cells or on two cloned B cell lines that constitutively produce kappa. Thus, TGF-beta may function during specific stages of B cell differentiation by inhibiting initiation of, or increased transcription of Ig genes, and therefore, may be an important negative regulator of B lymphopoiesis. It is the first natural substance found to have this effect.