Transgenic mice in which overexpression of the transforming growth factor alpha (TGF-alpha) gene was directed by the keratin-14 promoter were used to study the regulation of cell cycle progression and proliferation in vivo in the olfactory epithelium. The level of TGF-alpha protein was 73% greater in the nasal-olfactory epithelium of the transgenic mice than in that of nontransgenic littermate controls. Increased levels of TGF-alpha protein were accompanied by a 5.8-fold selective increase in the proliferation of phenotypically characterized horizontal basal cells in the transgenics compared with nontransgenics; in contrast, globose basal cells exhibited a similar low level of proliferation in both transgenics and nontransgenics. The level of expression of epidermal growth factor receptor protein, the receptor for TGF-alpha, was also upregulated in the transgenics, indicating a role for the ErbB tyrosine kinase receptor family in the response to TGF-alpha in the olfactory epithelium. TGF-alpha overexpression was also associated with increased expression of several early cell-cycle-associated proteins, including the growth factor sensor cyclin D1, retinoblastoma, E2F-1 transcription factor, and cyclin E, indicating the progression of relatively quiescent progenitor cells in the G1 phase of the cell cycle toward the G1/S restriction point, after which the cells become refractive to mitogens. These results demonstrate a role for the growth factor TGF-alpha in the in vivo regulation of cell cycle progression and proliferation in the mitotically active olfactory epithelium in these transgenic mice.