Exuberant tumor-like synovial cell proliferation with invasion of periarticular bone is a feature of rheumatoid arthritis in humans and of streptococcal cell wall (SCW)-induced arthritis in rats. These histologic observations prompted us to examine synoviocytes from arthritic joints for phenotypic characteristics of transformed cells. The capacity to grow in vitro under anchorage-independent conditions is a characteristic that correlates closely with potential in vivo tumorigenicity. In medium supplemented with 20% serum or in basal media supplemented with platelet-derived growth factor (PDGF), early passage synoviocytes from both SCW-induced and rheumatoid arthritic joints formed colonies in soft agarose. Epidermal growth factor (EGF), interleukin 1 (IL-1), tumor necrosis factor-alpha (TNF-alpha), interferon-gamma (IFN-gamma), and transforming growth factor-beta (TGF-beta) did not support growth, although EGF enhanced PDGF-dependent growth. On the other hand, TGF-beta, as well as all-trans-retinoic acid, inhibited colony growth. Early passage normal rat and human synoviocytes also grew under the same conditions, but lung, skin, and late-gestation embryonic fibroblast-like cells did not. Considered in the context of other published data our findings provide cogent evidence that synoviocytes, but not other types of fibroblast-like cells, readily acquire phenotypic characteristics commonly associated with transformed cells. Expression of the transformed phenotype in the inflammatory site is likely regulated by paracrine growth factors, such as PDGF and TGF-beta.