Transforming growth factor betas (TGF-betas) are the potent growth inhibitors for various cell types. Certain transformed cells, however, show poor response to TGF-beta-induced growth inhibition, which contributes to their uncontrolled proliferation. Recently, we have reported that TGF-beta1 induces degradation of activated Src tyrosine kinase in rat fibroblasts. To elucidate the alteration in TGF-beta signaling pathway in tumor cells that cannot respond to the cytokine, we compared the effects of TGF-beta1 on Src kinase in two human hepatoma cell lines, TGF-beta1-insensitive Mahlavu cells and TGF-beta1-sensitive HepG2 cells. TGF-beta1 decreased Src kinase activity in HepG2 cells, but increased cellular Src levels and Src kinase activity in Mahlavu cells. Co-incubation of Mahlavu cells with TGF-beta1 and 12-O-tetradecanoyl phorbol 13-acetate (TPA) decreased Src protein levels and Src kinase activity, inducing TGF-beta1 sensitivity. TGF-beta1 induced tyrosine dephosphorylation of Ras guanosine triphosphatase-activating protein (Ras-GAP) and Ras inactivation in HepG2 cells, but induced Ras-GAP phosphorylation and Ras activation in Mahlavu cells. The Src kinase inhibitor abolished the increase of Src kinase activity in TGF-beta1-treated Mahlavu cells, and induced TGF-beta1 sensitivity. These findings suggest that regulation of Src kinase by TGF-beta1 is altered in Mahlavu cells. The altered regulation of Src may contribute to TGF-beta1 insensitivity in this cell line, at least in part through activation of Ras.