Transforming growth factor beta (TGF-beta), a potent fibrogenic cytokine, is secreted in latent form. We examined which cell type in both normal and carbon tetrachloride (CCl4)-induced fibrotic rat liver bears surface type IIIGF/mannose 6-phosphate (IGF-II/M6P) receptor, known to facilitate activation of TGF-beta. In addition, the role of the IGF-II/M6P receptor in activation of latent TGF-beta was investigated in a coculture system with sinusoidal endothelial cells. Northern hybridization analysis for IGF-II/M6P receptor messenger RNA (mRNA) was performed on total RNA of different isolated and purified liver cell types. In normal liver, cells expressed little IGF-II/M6P receptor mRNA. In fibrotic liver, we found significant expression only in fat-storing cells. The presence of IGF-II/M6P receptors was established by [I-125]IGF-II binding assays on freshly isolated fat-storing cells from normal and CCl4-exposed rat livers. We found specific binding of [I-125]IGF-II only on CCl4 exposed fat-storing cells. As determined by polyacrylamide gel electrophoresis arter affinity labeling, the specific binding involved 220 kD type II IGF receptors. Scatchard analysis revealed the presence of 3,043 +/- 1,378 IGF-II/M6P high-affinity receptors/fat-storing cell, with a K-d of 387 +/- 165 pmol/L. With a mink lung epithelial cell (Mv(1)Lu) proliferation inhibition assay, inhibition of proliferation (a measure of active TGF-beta function) was determined using conditioned media of activated ht storing cells, cocultures of fat-storing cells, and endothelial cells and pure endothelial cell cultures. We found that conditioned media of cocultures of fat storing cells and endothelial cells inhibits the growth of Mv(1)Lu cells more strongly than conditioned media of homotypic cultures. Addition of neutralizing anti-TGF-beta antibodies neutralizes this effect. The contribution of IGF-II/M6P receptors on the cell membrane of activated fat-storing cells to the activation of latent TGF-beta was demonstrated by incubating the cells with M6P, or antibodies directed to the IGF-II/M6P receptor, both of which diminishes activation of TGF-beta. We conclude that IGF-II/M6P receptors are present on activated fat-storing cells and that the presence of this receptor at the cell surface is necessary, but not sufficient, for activation of latent TGF-beta. Other factors, derived from endothelial cells, are involved.