Beginning with the observation that hepatocyte growth factor (HGF) induces the formation of branching tubular structures in Madin-Darby canine kidney (MDCK) cells cultured in Type I collagen gels but not in basement membrane Matrigel, we examined the individual components within this complex basement membrane extract to determine the effect of these proteins on the morphogenetic changes mediated by HGF. After extraction of several growth factors from Matrigel, HGF was still unable to induce process formation, an early event in tubulogenesis, indicating that one or more of the remaining extracellular matrix (ECM) proteins or growth factors were exerting the inhibitory effect. By individually adding back these components to MDCK cells grown in Type I collagen gels in the presence of HGF, we were able to establish that: (1) certain ECM proteins, such as laminin, entactin, and fibronectln, actually facilitated the formation of branching tubular structures and increased their complexity; (2) other ECM proteins, such as Type IV collagen, heparan sulfate proteoglycan, and vitronectin, caused marked inhibition of HGF-induced morphogenesis; and (3) not only did transforming growth factor-β (TGF-β) inhibit the formation of tubular structures, but those which did form exhibited little branching, thereby suggesting that TGF-β modulates tubulogenesis as well as branching. These results suggest that a tubulogenic morphogen such as HGF and a tubulogenesis-inhibitory morphogen such as TGF-β can, in the context of the dynamic matrix known to exist during epithelial tissue development, modulate the degree of tubule (or ductal) formation, the length of these tubules, and the extent of their arborization. The relevance of these findings to tubulogenesis and branching during kidney development is discussed.