In human embryonic lung fibroblasts, transforming growth factor-beta 1 (TGF-beta 1) induced a time-dependent down-regulation of M2 muscarinic receptor binding sites as measured with the nonselective hydrophilic ligand [3H]N-methylscopolamine (NMS). This down-regulation was slow, with 58% loss of all receptors after 24 hr of treatment. The affinity of [3H]NMS for the remaining sites was unaltered by TGF-beta 1. The loss in [3H]NMS binding was accompanied by reduced adenylyl cyclase activity and functional desensitization of M2 muscarinic receptors. Northern blot analyses showed a 72% decrease in the steady state levels of m2 muscarinic receptor mRNA after 24-hr TGF-beta 1 treatment. Recovery of m2 muscarinic receptor mRNA after TGF-beta 1 treatment was slow, with a half-life of approximately 8 hr. There was no effect of TGF-beta 1 on the m2 muscarinic receptor mRNA half-life measured in the presence of actinomycin D, but the rate of m2 muscarinic receptor gene transcription measured with nuclear run-on assay was reduced by 50%, indicating reduced gene transcription. Cycloheximide (10 micrograms/ml) pretreatment abolished the TGF-beta 1 effect, indicating that de novo protein synthesis was required for receptor downregulation. In summary, we have shown that TGF-beta 1 induced desensitization and down-regulation of M2 muscarinic receptor protein and gene that was mediated through reduction in the rate of m2 receptor gene transcription.