The functional expression of Ca2+-activated K+ channels (KCa) in developing chick ciliary ganglion (CG) neurons requires interactions with target tissues and preganglionic innervation. Here, we show that the stimulatory effects of target tissues are mediated by an isoform of TGFbeta. Exposure of cultured CG neurons to TGFbeta1, but not TGFbeta2 or TGFbeta3, caused robust stimulation of KCa. The KCa stimulatory effects of target tissue extracts were blocked by a neutralizing pan-TGFbeta antiserum but not by specific TGFbeta2 or TGFbeta3 antisera. Intraocular injection of TGFbeta1 caused robust stimulation of KCa, whereas intraocular injection of pan-TGFbeta antiserum inhibited expression of KCa in CG neurons developing in vivo. The effects of TGFbeta1 were potentiated by beta-neuregulin-1, a differentiation factor expressed in preganglionic neurons.