Salivary mesenchyme is a potent stimulator of mammary epithelial hyperplasia and carcinogen-induced tumor formation in vivo. We have utilized a three-dimensional collagen gel culture system, which mimics the in vivo growth environment, to identify growth stimulatory molecules produced by salivary mesenchyme cells. In this report we describe the development and characteristics of salivary mesenchyme cell lines, and we present further evidence that these cells produce growth factor(s) which could account for the effect by interacting with epidermal growth factor (EGF) receptors on primary mouse mammary epithelial cells isolated from midpregnant mice. Using a receptor assay with isolated cell membranes, we characterized [125I]-EGF binding to mammary epithelial cells cultured within collagen gels. Scatchard analysis revealed one class of high affinity EGF receptors with a Kd ranging from 8.3 x 10(-11) M on day one to 5.1 x 10(-11) M on day 10 of the culture period. Addition of 10 ng/ml purified EGF to the culture medium progressively up-regulated the expression of EGF receptors during a 10-day culture period. Scatchard analysis showed that the increase in specific [125I]-EGF binding was due predominantly to an increase in EGF receptor number. We also demonstrated that conditioned medium collected from salivary mesenchyme cells competed effectively for EGF receptor sites on mammary epithelial cells, and chronic exposure to conditioned medium up-regulated EGF receptor expression. Thus, EGF-related growth factor(s) released by salivary mesenchyme cells may induce hyperplasia of adjacent mammary epithelium in vivo, both by directly activating EGF receptors, and by provoking long term up-regulation of EGF receptors.