Normal human bronchial epithelial (NHBE) cells respond to signals initiated by the binding of transforming growth factor-beta type 1 (TGF-beta 1) to its surface receptors by activating pathways that result in terminal squamous differentiation. By use of both normal and SV40 T-antigen-immortalized cells, it was found that treatment with TGF-beta 1 transiently increases mRNA levels for urokinase (uPA) and plasminogen activator inhibitor type 1 (PAI-1) approximately 5- and 50-fold, respectively, within 4 h. In NHBE cells, PAI-1 protein is increased by TGF-beta 1 in both extracellular matrix and medium. The net effect of TGF-beta 1 on plasminogen activator activity in the medium was a 50% reduction as measured by a caseinolytic assay. A T-antigen-immortalized bronchial epithelial cell line that does not undergo squamous differentiation in response to TGF-beta 1 but binds this growth factor did not respond to TGF-beta 1 by modulation of either uPA or PAI-1 expression. Comparison of human bronchial epithelial, pleural mesothelial, and lung fibroblastic cell strains indicated that the epithelial cells have a constitutively higher ratio of uPA to PAI-1 mRNA expression. These data suggest that modulation of pericellular proteolysis in bronchial epithelial cells in response to TGF-beta 1 represents a significant biological change in their pericellular environment. The induction of uPA and PAI-1 expression in human bronchial epithelial cells may be related to the ability of the cell to undergo squamous differentiation in response to TGF-beta 1. These observations identify specific changes in gene expression that may serve as markers for the differentiation process.(ABSTRACT TRUNCATED AT 250 WORDS)