Angiogenesis inhibitors produced by a primary tumor can create a systemic anti-angiogenic environment and maintain metastatic tumor cells in a state of dormancy. We show here that the gallbladder microenvironment modulates the production of transforming growth factor (TGF)-beta1, a multifunctional cytokine that functions as an endogenous anti-angiogenic and anti-tumor factor in a cranial window preparation. We found that a wide variety of human gallbladder tumors express TGF-beta1 irrespective of histologic type. We implanted a gel impregnated with basic fibroblast growth factor or Mz-ChA-2 tumor in the cranial windows of mice without tumors or mice with subcutaneous or gallbladder tumors to study angiogenesis and tumor growth at a secondary site. Angiogenesis, leukocyte-endothelial interaction in vessels and tumor growth in the cranial window were substantially inhibited in mice with gallbladder tumors. The concentration of TGF-beta1 in the plasma of mice with gallbladder tumors was 300% higher than that in the plasma of mice without tumors or with subcutaneous tumors. In contrast, there was no difference in the plasma levels of other anti- and pro-angiogenic factors. Treatment with neutralizing antibody against TGF-beta1 reversed both angiogenesis suppression and inhibition of leukocyte rolling induced by gallbladder tumors. TGF-beta1 also inhibited Mz-ChA-2 tumor cell proliferation. Our results indicate that the production of anti-angiogenesis/proliferation factors is regulated by tumor-host interactions.