Epithelial-mesenchymal interactions are responsible for the unique pattern of ductal branching morphogenesis characteristic of the mammary gland. To investigate the factors which control the elongation and branching of lactiferous ducts, we developed an in vitro model of ductal morphogenesis in which clonal mouse mammary epithelial cells (TAC-2 cells) are grown in collagen gels. In this experimental system, fibroblast conditioned medium (CM)3 stimulates the formation of extensively arborized tubules. The molecule responsible for this tubulogenic effect was identified as hepatocyte growth factor/scatter factor (HGF/SF). To determine whether HGF/SF plays a role in mammary gland morphogenesis in vivo, the expression of HGF/SF and its receptor, c-Met, were analyzed in the rat mammary gland during pregnancy, lactation, and involution. Levels of HGF/SF and c-Met transcripts were progressively reduced during pregnancy, were virtually undetectable during lactation, and increased again during involution. Collectively, these in vitro and in vivo findings suggest that HGF/SF is a paracrine mediator of mammary gland ductal morphogenesis. We subsequently investigated the effect of another multifunctional cytokine, namely TGF-beta1, on branching morphogenesis of TAC-2 cells. TGF-beta1 had a striking biphasic effect: whereas relatively high concentrations of this cytokine inhibited colony formation, lower concentrations stimulated extensive elongation and branching of epithelial cords. Taken together, these studies indicate that HGF/SF is a stromal-derived paracrine mediator of mammary ductal morphogenesis, and that when present at low concentrations, TGF-beta1 can contribute to this process.