Although our laboratory has reported that normal human osteoblast-like (hOB) cells contain estrogen receptors, we have failed to find major effects of 17β-estradiol (E₂) on modulation of proliferation of bone matrix protein production by hOB cells. Because the major effect of E₂in vivo is to decrease bone resorption and because transforming growth factor-β (TGF-β) has been reported to decrease osteoclast-mediated bone resorption, we have tested the hypothesis that the effect of E₂ on osteoclast activity is, at least in part, indirectly mediated by enhancing production of TGF-β by osteoblasts. We therefore have extended our studies to examine possible TGF-β gene expression including the modulation of the release of TGF-β by E₂ in near homogenous populations of hOB cells. TGF-β protein production was measured using growth inhibition of CCL-64 cells and verified by blocking effects with anti-TGF-β antibodies. TGF-β messenger RNA (mRNA) steady state levels were assessed by northern blot analysis and quantitated by densitometric measurement using 18S ribosomal RNA as a reference. There was an E₂ dose-dependent increase in TGF-β protein production within 24 h of challenge with E₂. Northern blots from these cells demonstrated a dose-dependent increase steady state mRNA levels of TGF-β within 6 h of treatment. PTH was also a potent stimulator of TGF-β protein and message levels in a dose-dependent manner. Interestingly, coincubation of equimolar concentrations of E₂ and PTH (10⁻⁸ M) abrogated the stimulation of TGF-β mRNA and protein. Decreasing the relative concentration of PTH in this coincubation with increased TGF-β mRNA and protein levels. These data support the fact that E₂ modulates TGF-β production in osteoblasts. this manner TGF-β may mediate E₂ inhibition of osteoclast activity. (Endocrinology129: 3313–3320, 1991)