Murine peritoneal macrophages and the macrophage-like cell line, P388D1, were found to release both mitogenic and inhibitory modulators of growth of cells in culture. These growth factors were effective against both murine Swiss 3T3 fibroblasts and porcine aortic smooth muscle cells as assessed by [3H]thymidine incorporation into DNA and by measurement of cell number. Partial characterisation of the inhibitory activity demonstrated it to be lost on dialysis using a membrane with a 10 kDa cut-off, trypsin sensitive, heat stable, and slightly sensitive to freeze-thawing. The inhibitory activity not only affected cell growth but was found to change the morphology of porcine aortic smooth muscle cells. Gel permeation studies showed an estimated molecular mass in the range 2.5 to 6.5 kDa. The inhibitory activity could be partially purified using ion-exchange chromatography. Experiments with a neutralising antibody against transforming growth factor beta (TGF-beta) showed that TGF-beta is not responsible for the activity observed. Indomethacin had no effect on the production of inhibitor suggesting that it is not an inhibitory prostanoid. The inhibitory activity was not due to a non-specific toxic mechanism as confirmed by a [3H]adenine release assay. Incubation of P388D1 cells with cycloheximide prevented the release of inhibitory activity.