NOG-8 ras cells are a normal mouse mammary epithelial cell line transfected with a plasmid containing a glucocorticoid-inducible mouse mammary tumor virus long terminal repeat linked to the activated c-Ha-ras protooncogene. After addition of dexamethasone, there is a rapid induction (within 1-3 h) of p21ras protein that is concomitant with a parallel induction of the c-Ha-ras specific mRNA. After 4-6 days of dexamethasone treatment, NOG-8 ras cells are able to grow as colonies in semisolid medium. Between 9 and 12 days of dexamethasone treatment, there is a 5- to 6-fold increase of transforming growth factor alpha (TGF alpha) activity in the conditioned medium from NOG-8 ras cells. A 60-65% reduction in epidermal growth factor cell surface receptors on NOG-8 ras cells also occurs during this time interval. A 3- to 4-fold increase of the expression of a specific TGF alpha mRNA can be detected within 2 days of dexamethasone treatment, preceding the increase in TGF alpha protein found in the conditioned medium. Exogenous TGF alpha is able to stimulate in a dose-dependent fashion the anchorage-dependent and anchorage-independent growth of NOG-8 ras cells to a level comparable to that observed in dexamethasone treated ras-transformed NOG-8 ras cells. These results suggest that the enhanced expression of TGF alpha after induction of an activated ras protooncogene may be necessary for the anchorage-independent growth and subsequent morphological changes and the enhanced growth rate observed in ras-transformed mammary epithelial cells.