The growth of synovial fibroblast-like cells from patients with rheumatoid arthritis and rats with streptococcal cell wall (SCW)-induced arthritis in vitro under anchorage-independent conditions is inhibited by transforming growth factor-beta (TGF-beta). Because this growth factor is present in rheumatoid synovial fluids, we studied whether this cytokine might be secreted by cells in rheumatoid synovial tissue. We show that synovial tissues from patients with rheumatoid arthritis and osteoarthritis, and rats with SCW-induced arthritis, contain TGF-beta-1 mRNA. TGF-beta, predominantly type 1, was spontaneously secreted in vitro by synovial tissue explants and synovial fibroblast-like cells. In addition, TGF-beta could be detected immunohistochemically in cells throughout rheumatoid and SCW-induced arthritic rat synovial tissues. Finally, exogenous TGF-beta induced collagen and inhibited collagenase mRNA levels by cultured synoviocytes. These data support an autocrine role for TGF-beta in the regulation of synoviocytes in rheumatoid arthritis and, in light of its demonstrated effects on the immune system, suggest that TGF-beta might also have important paracrine effects on infiltrating inflammatory cells.