The profound effects of transforming growth factor β1 (TGF‐β1) on the immune system, cardiogenesis, in yolk sac hematopoeisis and in differentiation of endothelium have been demonstrated by detailed analyses of TGF‐β1 knockout mice during embryogenesis. We have systematically examined the autocrine and paracrine roles of TGF‐β1 in cell proliferation and in its ability to modulate the gene expression of selected components of extracellular matrix (ECM) using embryonic fibroblasts from TGF‐β1 null mice (TGF‐β1^−/−). The rates of cell proliferation of embryonic fibroblasts from normal mice (TGF‐β1^+/+) and TGF‐β1 null mice were compared by cell counting, by ³H thymidine incorporation, and by measuring the fraction of cells in the G1, S, and G2/M phases of the cell cycle by fluorescent activated cell sorting (FACS). Concurrently, the expression of pro‐α1(I) collagen, fibronectin, and plasminogen activator inhibitor‐1 (PAI‐1) was also quantified by hybridization of total mRNA from TGF‐β1^+/+ and TGF‐β1^−/− embryonic fibroblasts. We report that TGF‐β1^−/− cells proliferated at about twice the rate of TGF‐β1^+/+ cells. Further, TGF‐β1 null fibroblasts accumulated and synthesized lower constitutive levels of pro‐α1(I) collagen, fibronectin, and PAI‐1 mRNA. The quantitative differences in the rates of cell proliferation and ECM gene expression between TGF‐β1^+/+ and TGF‐β1^−/− cells could be eliminated by treatment of TGF‐β1^+/+ cells with a neutralizing antibody of TGF‐β1. Thus, our results are consistent with the hypothesis that TGF‐β1 acts as a negative autocrine regulator of growth and a positive autocrine regulator of ECM biosynthesis in embryonic fibroblasts. 176:67–75, 1998. Published 1998 Wiley‐Liss, Inc.