We have previously shown that Madin-Darby canine kidney (MDCK) epithelial cells grown in collagen gels in the presence of fibroblasts orfibroblast-conditioned medium (CM) form branching tubules, instead of the spherical cysts that develop under control conditions. We now report that the fibroblast-derived molecule responsible for epithelial tubulogenesis is hepatocyte growth factor (HGF). First, addition of exogenous HGF to cultures of MDCK cells induces formation of epithelial tubules. Second, the tubulogenic activity of fibroblast CM is completely abrogated by antibodies to HGF. These results demonstrate that HGF, a polypeptide that was identified as a mitogen for cultured hepatocytes, has the properties of a paracrine mediator of epithelial morphogenesis, and suggest that it may play important roles in the formation of parenchymal organs during embryonic development.