A polypeptide growth inhibitor purified from bovine mammary gland (mammary-derived growth inhibitor) has been shown to reversibly inhibit proliferation of mammary carcinoma cells at concentrations of about 10(-10) M. The carrier of inhibitory activity has been identified biochemically as an about 13-kDa polypeptide and chemically by elucidating the amino acid sequence. No homology to any of the hitherto structurally investigated growth inhibitors (transforming growth factor beta, interferons) has been observed. The data revealed extensive sequence homology of mammary-derived growth inhibitor to a family of low molecular mass hydrophobic ligand-binding proteins, among them a fatty acid-binding protein from rat heart, myelin P2, a differentiation associated protein in adipocytes (p422) and the cellular retinoic acid-binding protein. Interaction with as yet unknown hydrophobic ligands might play a functional role in the mechanism of growth inhibition excerted by mammary-derived growth inhibitor.