Recombinant DNA plasmids coding for transforming growth factor beta 2 (TGF-beta 2) precursor and a hybrid TGF-beta 1(NH2)/beta 2(COOH) molecule consisting of the amino-terminal precursor portion of transforming growth factor-beta 1 (TGF-beta 1) linked in phase to the carboxyl terminus of mature TGF-beta 2 were constructed and transfected into COS cells. Both plasmids directed the synthesis of active TGF-beta 2 which was secreted into the supernatants of transfected cells. The TGF-beta 2 was secreted in a latent form, as an acidification step was required to demonstrate optimal biological activity. Using site-specific anti-peptide antibodies, we show that precursor and mature forms of TGF-beta 2 are produced. A stable Chinese hamster ovary (CHO) cell line expressing the hybrid TGF-beta 1(NH2)/beta 2(COOH) protein was isolated. This cell line secreted both precursor and mature forms of TGF-beta 1(NH2)/beta 2(COOH); acidification was required to demonstrate biological activity. Protein sequence analysis of recombinant TGF-beta 2 produced by this CHO clone demonstrated that correct proteolytic cleavage had occurred, suggesting that the processing signals contained within the TGF-beta 1 amino portion can function in producing mature TGF-beta 2. Receptor binding studies showed that TGF-beta 2 specifically bound predominantly to type III receptors on the surface of human palatal mesenchymal cells. The availability of active TGF-beta 2 should aid in determining its potential therapeutic use as a growth modulator.