Transforming growth factor (TGF) beta 1 has been implicated in the control of hepatocyte growth and stimulation of extracellular matrix synthesis in acute and chronic liver disease. The cellular localization of transforming growth factor (TGF) beta 1 and beta 2 RNA transcripts was determined in normal and fibrotic liver by in situ hybridization with [35S]-labeled RNA probes in combination with immunostaining for cell type characteristic markers. Fibrotic specimens were from patients with hepatitis B virus infection or alcohol abuse and rats with fibrosis secondary to bile duct ligation and scission. In normal liver, low levels of TGF beta 1 transcripts were found in some portal tract stromal cells, and TGF beta 2 RNA was not detectable. In fibrotic liver, high TGF beta 1 RNA levels were present in most mesenchymal liver cells, in most inflammatory cells, and in few bile duct epithelial cells. Hepatocytes did not express this cytokine with the exception of few limiting plate hepatocytes in cases of human cirrhosis with high activity. TGF beta 2 transcripts were detected at high levels in proliferating bile ducts of fibrotic livers, but were absent in all other cell types. TGF beta 1 expression in the liver is thus a function predominantly of mononuclear and mesenchymal cells as well as of some hepatocytes, whereas TGF beta 2 expression is a specific property of bile duct epithelial cells that may be related to the formation of specialized periductular connective tissue during bile duct proliferation.