Transforming growth factor β has a specific stimulatory effect on collagen formation by hepatic lipocytes, a cell type believed to be a major source of extracellular matrices in the liver. Because monocytes and macrophages are the known sources of transforming growth factor β, Kupffer cells‐resident macrophages in the liver‐may also play an important role in liver fibrogenesis by releasing this cytokine and stimulating lipocyte collagen production. The present study tested this hypothesis using Kupffer cells and hepatic lipocytes isolated from a rat model of alcoholic liver fibrosis. Kupffer‐cell‐conditioned medium derived from the rat liver with alcoholic fibrosis, but not that from pair‐fed control animals, significantly stimulated the net collagen formation of lipocytes isolated from the alcohol‐fed, pair‐fed control and chow‐fed animals. Acidification of the Kupffer‐cell‐conditionied medium potentiated this effect threefold to fourfold, indicating the presence of a latent form. Fractionation of the Kupffer‐cell‐conditioned medium by high‐performance liquid chromatography gel filtration revealed the major peak of the stimulatory activity corresponding to the molecular weight between 20 kD and 30 kD. It was completely inhibited by anittransforming growth factor β IgG. Furthermore, Northern blotting and hybridization of Kupffer‐cell messenger RNA from alcohol‐fed rats with ³²P‐labeled transforming growth factor β complementary DNA demonstrated the presence of 2.5 kb messenger RNA for this cytokine. We conclude that: (a) Kupffer cells isolated from the rat liver with alcoholic fibrosis express and release transforming growth factor β; (b) that this cytokine is largely responsible for the Kupffer‐cell‐conditioned medium‐induced stimulation of collagen formation by hepatic lipocytes; and (c) that this may represent a possible molecular mechanism of lipocyte stimulation during alcoholic liver fibrogenesis.(HEPATOLOGY 1990; 11:599:605.)