To understand mechanisms at the cellular level that may lead to the selective organomegaly seen in fetuses of diabetic mothers, we examined the role of insulin and autocrine-paracrine growth factors in the regulation of hepatic growth in the fetal rat. Analyses of fetal liver from the last one-third of gestation demonstrated the presence of specific mRNAs for the transforming growth factors (TGFs) TGF-alpha and TGF-beta. TGF-alpha, a homologue of epidermal growth factor (EGF), acts through EGF receptors. Levels of mRNA for TGF-alpha increased dramatically postnatally, whereas EGF receptor number increased just before term. In contrast, levels of mRNA for TGF-beta, an inhibitor of epithelial cell growth, were greater in fetal liver than in adult liver, as was TGF-beta-receptor binding. Other analyses demonstrated increases in tyrosine kinase activities of the insulin receptor, EGF receptor, and insulinlike growth factor I receptor as term approached. Proliferation of fetal rat hepatocytes in primary culture did not require mitogens or serum, consistent with production and activity of autocrine-paracrine growth factors. TGF-beta was a potent inhibitor of fetal hepatocyte proliferation in culture, whereas insulin potentiated fetal hepatocyte growth above "mitogen-independent" levels. The regulatory mechanisms controlling fetal hepatic growth involve a complex interaction between stimulatory and inhibitory factors. Growth factor expression, receptor expression, receptor tyrosine kinase activity, and postreceptor signal transmission represent potential loci for insulin action that might be involved in the pathogenesis of fetal macrosomia seen in diabetic pregnancies.