The human embryonal carcinoma cell lines Tera-2 clone 13 and NTera-2 clone D1 can be induced by retinoic acid to differentiate in vitro into neuroectodermal derivatives. The undifferentiated cells are rapidly proliferating and tumorigenic, whereas retinoic-acid-treated cells possess a decreased growth rate, lose their transformed phenotype and show a finite lifespan. Differentiation is accompanied by a marked increase in the levels of mRNA for TGF-beta 1 and TGF-beta 2 and the production of TGF-beta activity. Just like murine embryonal carcinoma cells the growth of Tera-2 clone 13 cells is not affected by the addition of either TGF-beta 1 or TGF-beta 2 to the culture medium. In contrast to published data on murine embryonal carcinoma cells, Tera-2 clone 13 and NTera-2 clone D1 cells bind TGF-beta 1 with high affinity, which is due to the presence of type-III TGF-beta receptors. Furthermore, and again in contrast to murine embryonal carcinoma cells, treatment of the human embryonal carcinoma cells with retinoic acid causes a nearly complete loss of TGF-beta 1 binding sites. These results are discussed in the light of similarities and differences in the regulation of growth and differentiation of human and murine embryonal carcinoma cell lines.