Transforming growth factor beta (TFG-beta) is a multifunctional growth factor that promotes the growth of fibroblasts, collagen synthesis and angiogenesis, and stimulates monocyte migration and activation, but suppresses the growth and differentiation of immune lymphocytes and killer cells. Previously we demonstrated biologic activity for TGF-beta in supernatants of fresh Hodgkin's disease (HD) cell cultures and the cell line L428 derived from nodular sclerosing HD. This study was undertaken to find evidence of TGF-beta activity directly in tissues affected by HD. Formalin-fixed tissue from 14 patients with HD, including 8 nodular sclerosis, 4 mixed cellularity, 1 lymphocyte predominance, and 1 lymphocyte depletion type were studied by immunoperoxidase technique with antibody CC (1-30) raised against a synthetic polypeptide with the same N-terminal amino acid sequence as TGF-beta 1. Transforming growth factor beta activity was demonstrated in six cases of nodular sclerosis but not in other histologic types of HD. Staining for TGF-beta was found in the cytoplasm of Reed-Sternberg (RS) cells in one case and on the surface of RS cells and their lacunar variants in five cases. Transforming growth factor beta activity associated with the extracellular matrix was localized mainly around blood vessels, zones of necrosis, at the margins of bands of collagen sclerosis, and in areas containing syncytia of RS cells. In two cases TGF-beta was associated with collections of epithelioid histiocytes or granulomas. Small lymphocytes, granulocytes, and germinal center cells were unreactive. These results suggest that TGF-beta is a growth factor of biologic importance in HD and may be responsible for many of the histologic features, such as nodular sclerosis and granulomas, that may have prognostic significance.