Extracts of the Drosophila cell line KCo contain a TGF-beta-like activity. This bioactivity, like mammalian TGF-beta, induces the anchorage-independent growth of rat NRK-49F cells in the presence of EGF, inhibits 3H-thymidine incorporation in the mink epithelial cell line CCL-64 and is acid and heat stable but destroyed by dithiothreitol. On a reverse phase column a single bioactive peak eluted at 37-40% acetonitrile. This TGF-beta-like activity in KCo cells inhibits the growth of the homotypic Drosophila cell line 14-11-23, whereas porcine TGF-beta 1 had no effect.