Transforming growth factor alpha (TGF-alpha) is biosynthesized as a membrane-bound precursor protein, pro-TGF-alpha, that undergoes sequential endoproteolytic cleavages to release a soluble form of the factor. In the present study, we have analyzed the biosynthesis and regulation of TGF-alpha production in human tumor-derived cell lines that endogenously express pro-TGF-alpha and the epidermal growth factor (EGF) receptor. These cells biosynthesized membrane-anchored forms of the TGF-alpha that accumulated on the cell surface. Membrane-bound pro-TGF-alpha interacted with the EGF receptor, and complexes of receptor and pro-TGF-alpha contained tyrosine-phosphorylated receptor. Activation of the EGF receptor by soluble EGF or TGF-alpha had a dual effect on TGF-alpha production: an increase in pro-TGF-alpha mRNA levels and an increase in pro-TGF-alpha cleavage. These effects were largely prevented by preincubation with an anti-EGF receptor monoclonal antibody that blocked ligand binding. Growth factor autoinduction of cleavage could be stimulated by several second messenger pathways that are activated by the EGF receptor, including protein kinase C and intracellular calcium, and by other alternative mechanisms. EGF-stimulated cleavage of pro-TGF-alpha could be partially blocked by inhibition of these second messenger pathways. These results suggest that juxtacrine stimulation takes place in human tumor cells that coexpress both the EGF receptor and membrane-anchored TGF-alpha and that TGF-alpha is able to induce its own endoproteolytic cleavage by activating the EGF receptor.