Progenitor cells of the valves and membranous septa of the vertebrate heart are formed by transformation of a specific population of endothelial cells into mesenchyme. Previous studies have shown that this epithelial-mesenchymal cell transformation is mediated by a signal produced by the myocardium of the atrioventricular (AV) canal and transferred across the extracellular matrix. Data are presented here that transforming growth factor β (TGFβ1 or TGFβ2), in combination with an explant of ventricular myocardium, will produce an epithelial-mesenchymal transformation by cultured AV canal endothelial cells in vitro. Alone, neither component is capable of producing this effect. The factor provided by the ventricular explant cannot be substituted by either epidermal growth factor or basic fibroblast growth factor. Further experiments show that an antibody that blocks TGFβ activity is effective in preventing the epithelial-mesenchymal cell transformation normally produced by AV canal myocardium. Control antibodies are without effect. By immunological criteria, a member of the TGFβ family of molecules can be demonstrated in the chicken embryo and heart at the time overt valvular formation begins. Together, these data show that TGFβ1 can produce mesenchymal cell formation in vitro and provide evidence that a member of the TGFβ family is present and plays a role in the process of epithelial-mesenchymal cell transformation in the embryonic heart.