Transforming growth factor-beta1 (TGF-beta1) arrests growth and/or stimulates apoptosis of a variety of cells. The biochemical pathways involved in the apoptotic processes, however, remain poorly defined. TGF-beta1 induces DNA fragmentation together with morphological changes, which are characteristic of apoptosis in the FaO rat hepatoma cell line. Histones were remarkably enriched in lysates of these cells during TGF beta1-induced apoptosis. We identified U1-70 kd as a death substrate which is cleaved following TGF-beta1 treatment. The tetrapeptide caspase inhibitor carbobenzoxy-valyl-alanly-aspartyl-(beta-O-methyl)-fluoromethyl ketone (ZVAD-FMK) prevented TGF beta1-induced apoptotic DNA fragmentation and cleavage of the U1-70 kd protein, showing that caspase(s) are involved in TGF beta1-mediated apoptosis. To identify specific caspases involved in apoptosis induced by TGF-beta1 in FaO cells, proteolytic activation of several of these caspases and their substrates were studied as a function of time following TGF beta1-treatment. TGF beta1-treatment induced the progressive proteolytic processing of caspase-2 (ICH-1L/Nedd-2), whereas caspase-1 itself did not show any cleavage from the precursor. Pretreatment with ZVAD-FMK abrogated the maturation of caspase-2 and blocked the apoptotic progress. These results suggest that caspase-2, but not caspase-1, may play a crucial role in TGF beta1-induced apoptosis in these cells.