We have previously shown that first trimester human trophoblast cells share in vitro invasive properties with malignant cells. In this study we show that the in situ control of trophoblast invasion is provided by the uterine microenvironment. Trophoblast cells were labeled with 125l‐deoxyuridine and examined for their ability to invade an epithelium‐free human amniotic membrane in vitro under various conditions. The degree of invasion was determined as the percentage of the radioactivity retained within the membrane. Conditioned media from first trimester human decidual cells (DCM) suppressed invasion of trophoblast cells in the amnion invasion assay. This suppression was prevented by addition of neutralizing anti‐TGF β antibody or neutralizing antibody to tissue inhibitor of metalloproteinases (TIMP‐1) to the DCM, and mimicked by TGFβ,. These antibodies also augmented invasion beyond control levels, suggesting that trophoblast cells may also produce these factors. A bioassay for TGFβ activity, measured by antiproliferative effect on the mink lung epithelial cell line Mv 1 Lu, revealed that decidual cells produced this factor only in the latent form, whereas the active form was produced by the trophoblast. A decrease in collagenase type IV activity in the conditioned media of trophoblast cultures was observed when TGFβ was added to these cultures. Removal of endogenous TGFβ in trophoblast cultures by addition of anti‐TGFβ antibody resulted in down‐regulation of TIMP message as determined by Northern analysis. These results indicate that (a) decidua‐derived (and to a minor extent trophoblast‐derived) TGFβ is the prime mediator in the control of invasion by first trimester trophoblast, the latent form of TGFβlikely being activated by trophoblast‐derived proteinases; (b) induction of TIMPby TGFβ in both trophoblast and decidua is the final pathway in this control.