TGF-beta is an important immunoregulator as it suppresses proliferation and function of B- and T-lymphocytes. In the present study we have examined the cellular localization and secretion of TGF-beta in B-cells from normal donors and patients with CLL and have assessed the influence of TGF-beta 1 on DNA synthesis in these cells. Using anti-LC(1-30)--a polyclonal anti-TGF-beta 1 antibody--TGF-beta was localized to discrete sites within the cytoplasm of both normal and malignant lymphocytes. These areas co-localized with areas detected by an antigranule antibody (D545), suggesting that TGF-beta may be stored within cytoplasmic secretory vesicles. Both normal B- and CLL cells contained low or undetectable levels of TGF-beta mRNA and secreted low and equivalent amounts of TGF-beta. Compared to untreated cells, DNA synthesis was reduced by TGF-beta 1 to a mean +/- S. E. of 0.84 +/- 0.07 in CLL cells and this was significantly less (p < 0.001) than that observed in normal B-cells (mean +/- S. E. of control, 0.12 +/- 0.02). In 3 of the 18 patients, TGF-beta 1 stimulated DNA synthesis. The reduced inhibition of leukemic cell DNA synthesis by TGF-beta 1 in CLL may provide these cells with a growth or survival advantage over normal lymphocytes and contribute to their selective accumulation.