Portal fibroblasts (PF) are a newly isolated population of fibrogenic cells in the liver postulated to play a significant role in early biliary fibrosis. Because transforming growth factor-beta (TGF)-beta is a key growth factor in fibrosis, we characterized the response of PF to TGF-beta. We demonstrate that PF produce significant amounts of TGF-beta2 and, unlike activated hepatic stellate cells (HSC), express all three TGF-beta receptors and are growth inhibited by TGF-beta1 and TGF-beta2. Fibroblast growth factor (FGF)-2, but not platelet derived growth factor (PDGF), causes PF proliferation. These data suggest a mechanism whereby HSC eclipse PF as the dominant myofibroblast population in biliary fibrosis.