Transforming growth factor(TGF)pl is a potent inhibitor of growth in mouse osteoblastic MC3T3-El cells. To isolate genes that are induced by TGFPl, the differential screening method was adopted using a cDNA library constructed from cells treated with TGFPl for 4 h. Six independent cDNA clones were isolated (TGFP-stimulated clone, TSC-5, TSC-36, TSC-115, TSC-128, TSC-160 and TSC-161), the expression of which was increased by TGFPl-treatment with maximal expression at 6-10 h. The steady-state levels of TSC-36, TSC-128 and TSC-160 increased almost tenfold, whereas those of TSC-5, TSC-115 and TSC-161 were elevated at most threefold. From partial nucleotide sequences, TSC-160 was found to be identical to rrg (rus-recision gene, lysyl oxydase), and TSC-115 had 80% similarity with tropomyosin cDNA, whereas other genes seemed novel. Expression of TSC-36 and TSC-160 was dramatically decreased in v-Ki-ras-transformed MC3T3 cells or in transformed NIH 3T3 cells (DT), and was recovered to normal levels in a flat revcrtant (C11). A nearly full-length copy of TSC-36 cDNA was isolated, and an open reading frame indicated that it encodes a protein of 35 kDa. An antiserum was raised against the C-terminal peptide predicted from the nucleotide sequence, and a polypeptide with an approximate molecular mass of 38 kDa was detected in cultured medium of MC3T3-El cells. The amino acid sequence of TSC-36 protein was found to have some similarity with follistatin, an activin-binding protein, and a limited similarity with the secreted protein rich in cysteine (SPARC).Growth of cells is controlled both positively and negatively by various autocrine, paracrine or endocrine growth factors, and both control mechanims are essential to maintain homeostasis. Transforming growth factor 81 (TGFp1) is a potent inhibitor of growth in various types of cells, and it also affects differentiation and gene expression [l -41. Growth of some types of mesenchymal cells is stimulated by TGFP1, but we previously reported that it inhibited growth of mouse osteoblastic cells (MC3T3-El) in the late G1 phase [ 5 ] . Growth inhibition is accompanied by induction of a certain kind of genes.TGFPl has a pronounced effect on expression of many cellular gencs, with the most striking effects on extracellularmatrix-related proteins. It increases expression of genes encoding extracellular matrix proteins [6-121 as well as proteCorrespondence to K. Nose,