It is now apparent that the transforming growth factor beta (TGF-beta) family of proteins has potent immunoregulatory properties ranging from effects on the growth and differentiation of primitive stem cells to the differentiated functions of immune effector cells. Although most reports have described the immunosuppressive activities of TGF-beta, recent evidence supports the concept that TGF-beta can have both inhibitory and stimulatory actions on these systems. Recently, it has been found that TGF-beta can have autocrine as well as paracrine effects on the immune system, indicating that immune cells can activate the inactive secreted form of TGF-beta. Furthermore, TGF-beta has differential intracellular effects on cell surface receptor modulation, tyrosine phosphorylation, and cytokine gene transcription as well as cell-mediated cytotoxicity. Importantly, the administration of TGF-beta has proven beneficial in several animal disease models such as septic shock, allograft rejection, and autoimmunity. Moreover, the increased levels of TGF-beta found in several disease states associated with immunosuppression such as different forms of malignancy, chronic degenerative diseases, and AIDS implicate the involvement of TGF-beta in the pathogenesis of some diseases. Ultimately, well designed clinical trials will determine whether the exciting potential of TGF-beta can be used to treat or prevent disease.