Extracts of bovine corneal stroma have been shown to activate keratocytes in culture to proliferate. We fractionated stromal extract on a column of Sephacryl S-300 and tested the fractions for mitogenic activity using cell culture and for the presence of IGF-II and its binding protein IGFBP-2 by Western blot. We found that the mitogenic activity in the extract separated into major and minor peaks and that immunologically detectable IGF-II and IGFBP-2 co-eluted with the minor peak. We also compared the effects of 10 ng IGF-II/ml on keratocytes in culture to that of 2 ng TGF-β/ml over a 7-day culture period. We found that IGF-II and TGF-β, alone or combined, increased both 3 Hthymidine incorporation and DNA content of the cultures. The phenotype of the cells was determined by using antibodies to ι-SM (smooth muscle) actin, fibronectin, SPARC, lumican and keratocan in Western blots of cell layers of media. Keratocytes cultured in IGF-II expressed no ι-SM actin or fibronectin, low levels of SPARC and high levels of lumican and keratocan, indicating a native phenotype. Keratocytes in TGF-β expressed ι-SM actin, fibronectin, SPARC and lumican, and expressed no or low levels of keratocan, indicating a myofibroblast phenotype. Keratocytes cultured in IGF-II plus TGF-β, however, expressed ι-SM actin. fibronectin. SPARC, lumican, and keratocan by day 7 of culture. The results of this study show that IGF-II to be present in the corneal stroma, to stimulate keratocyte proliferation while maintaining native phenotype and to override the TGF-β mediated down regulation of keratocan production. The IGF-II in the stroma may serve as a mechanism to immediately activate keratocytes upon wounding and to ameliorate the scarring effects of TGF-β.