In this study the function of transforming growth factor-beta (TGF-beta) in preimplantation mouse embryos was examined. By RT-PCR, mRNA for the signalling type I (T beta R-I) and type II (T beta R-II) receptors for TGF-beta was shown to be present in two distinct time windows: in fertilized oocytes and at the blastocyst stage. The function of TGF-beta at these times was analysed in two ways. Firstly, the TGF-beta signalling pathway was blocked by injecting a DNA construct encoding a truncated T beta R-II, that acts as a dominant-negative receptor, in fertilized oocytes, and the effect on development was determined. Secondly, inner cell masses isolated at the blastocyst stage were cultured in vitro with and without TGF-beta under conditions that favour the outgrowth of parietal endoderm. The results show that TGF-beta signalling mediated by maternally expressed receptors is important for development of preimplantation embryos beyond the two-cell stage, and suggest a regulatory role for TGF-beta in the outgrowth of parietal endoderm.