Until recently, growth factors were thought to mainly influence cell proliferation. During the past several years, it has become evident that growth factors also exert a wide range of effects on cell differentiation, at least in vitro. Consequently, two questions have received careful scrutiny. How do growth factors exert their effects on cell differentiation? Do growth factors regulate cell differentiation in viva as they appear to in vitro? Impressive progress has been made in answering both questions. Similar advances have occurred in our understanding of the production of extracellular matrices. For many years, the extracellular matrix surrounding cells was believed to play primarily, if not exclusively, a structural role. However, it is now widely recognized that the extracellular matrix plays an active role in regulating embryological development, tissue repair, and abnormal cell proliferation. As a consequence, there has been a major effort to determine how the extracellular matrix performs its regulatory roles and, more recently, to understand how the production, distribution, and turnover of the extracellular matrix is regulated. Progress has been made on both fronts and there is currently good reason to suspect that growth factors exert many of their effects on differentiation by regulating the metabolism of extracellular matrices. This review will describe some of the recent advances in our understanding of the effects of growth factors on cell differentiation and extracellular matrices. Due to the abundance of recent work on growth factors and differentiation, it is not possible to cover all of the pertinent literature. This is also true for the literature pertaining to the extracellular matrix. Consequently, this review will focus on the effects of transforming growth factor type-p (TGF-P) and how it interacts with other growth factors to affect differentiation.