The precise role of TGF-beta in colorectal carcinogenesis is not clear. The purpose of this study was to determine the phenotypic alterations caused by chronic exposure to TGF-beta in non-transformed intestinal epithelial (RIE-1) cells. Growth of RIE-1 cells was inhibited by >75% following TGF-beta1 treatment for 7 days, after which the cells resumed a normal growth despite the presence of TGF-beta1. These 'TGF-beta-resistant' cells (RIE-Tr) were continuously exposed to TGF-beta for >50 days. Unlike the parental RIE cells, RIE-Tr cells lost contact inhibition, formed foci in culture, grew in soft agarose. RIE-Tr cells demonstrated TGF-beta-dependent invasive potential in an in vitro assay and were resistant to Matrigel and Na-butyrate-induced apoptosis. The RIE-Tr cells were also tumorigenic in nude mice. The transformed phenotype of RIE-Tr cells was associated with a 95% decrease in the level of the type II TGF-beta receptor (TbetaRII) protein, a 40-fold increase in cyclooxygenase-2 (COX-2) protein, and 5.9-fold increase in the production of prostacyclin. Most RIE-Tr subclones that expressed low levels of TbetaRII and high levels of COX-2 were tumorigenic. Those subclones that express abundant TbetaRII and low levels of COX-2 were not tumorigenic in nude mice. A selective COX-2 inhibitor inhibited RIE-Tr cell growth in culture and tumor growth in nude mice. The reduced expression of TbetaRII, increased expression of COX-2, and the ability to form colonies in Matrigel were all reversible upon withdrawal of exogenous TGF-beta1 for the RIE-Tr cells.