We have investigated the effect of basic fibroblast growth factor (bFGF) and the related int-2 gene on the growth, transformation, and differentiation of HC11 mouse mammary epithelial cells. We show that in HC11 cells infected with int-2 retroviral expression vectors, the int-2 protein can function as a bFGF-like growth factor in stimulating: (a) HC11 cell proliferation in monolayer, (b) anchorage-independent growth in soft agar, and (c) soft agar growth of the bFGF-responsive SW13 tumor cell line. These effects are observed irrespective of whether the int-2 protein is expressed in its wild-type form or is linked to a signal peptide. A candidate bFGF receptor, which is the product of the flg gene and which may recognize the int-2 protein, is expressed at high levels in HC11 cells. Following epidermal growth factor or bFGF priming and subsequent treatment with lactogenic hormones, all of the int-2 infected and the parental HC11 cells synthesize similar levels of beta-casein. However, the autocrine expression of int-2 in HC11 cells abrogates their requirement for either exogenous epidermal growth factor or bFGF priming. These data suggest that, in HC11 cells, the growth factor activity of the int-2 gene is indistinguishable from that of bFGF and does not interfere with the mammary cell differentiation program associated with lactogenesis.