We used type I collagen gel cultures to compare the growth requirements of melanocytes and dermal nevus cells. Melanocytes but not nevus cells undergo apoptosis in collagen unless supplied with growth stimulators such as fibroblast growth factor 2. To characterize the mechanism of melanocyte apoptosis in collagen, we tested the effects of transforming growth factor beta1, known to be functionally active in the skin. When picomolar amounts of transforming growth factor beta1 were added to normal melanocytes grown in type I collagen gel, their apoptosis was dramatically accelerated. In contrast, the apoptotic rate of nevus cells and melanoma cells grown under similar conditions was not affected by transforming growth factor beta1. The increased apoptosis of normal melanocytes was effectively counteracted by addition of either neutralizing transforming growth factor beta1 antibodies or fibroblast growth factor 2 to the collagen gel. Interestingly, the background apoptosis of normal melanocytes was also inhibited by transforming growth factor beta1 antibodies. By Western blotting we detected transforming growth factor beta-like immunoreactivity in melanocyte, nevus cell, and melanoma cell lysates. A sensitive bioassay confirmed that their medium contained considerable amounts of heat-activatable growth inhibitory activity that could partly be neutralized by transforming growth factor beta1 antibodies. It is evident that apoptosis of melanocytes grown in type I collagen gel can be mediated by both endogenous and exogenous transforming growth factor beta. We suggest that the balance between inhibitory growth factors such as transforming growth factor beta and stimulatory growth factors like fibroblast growth factor 2 has the potential to regulate the growth, localization, and survival of normal melanocytes also in vivo. The resistance of nevus cells to transforming-growth-factor-beta-mediated apoptosis may facilitate their ability to grow in the dermal compartment of the skin.