TGF-Beta plays an important role in the genesis and progression of pulmonary fibrosis. We sought to determine the role of mononuclear phagocytes in the activation of TGF-beta and found that freshly isolated peripheral blood monocytes spontaneously released TGF-beta. Stimulating these monocytes with GM-CSF or LPS, but not MCSF, augmented the activation of TGF-beta. In human monocytes, the free thiol compounds DTT and NAC decreased the activity of TGF-beta, without affecting TGF-beta mRNA transcription. Both NAC and DTT lessened the biological activity of recombinant active TGF-beta in a cell-free system. We found that NAC and DTT reduced dimeric active TGF-beta from a 25 kDa protein to 12.5 kDa inactive monomer. This conversion was reversed using the oxidizing agent diamide. Diamide also restored biological activity to NAC or DTT-treated TGF-beta. Reduction of TGF-beta to monomers could competitively inhibit active dimeric TGF-beta and block intracellular signaling events. Our observations suggest that modulation of the oxidative state of TGF-beta may be a novel therapeutic approach for patients with pulmonary fibrosis.