We studied a cell-cell interaction via transforming growth factor-beta (TGF-beta ) between liver stellate cells (SCs) and parenchymal cells (PCs) using co-cultures of rat primary SCs and PCs. Both TGF-beta added exogenously to the culture medium, and TGF-beta produced endogenously from SCs after stimulation with retinoic acid (RA), suppressed the production and secretion of albumin from PCs. This effect occurred at the translational level, but not at the transcriptional level; TGF-beta, as well as SC culture medium conditioned by RA, did not affect the albumin mRNA levels, but decreased the biosynthesis of [35-S]methionine-labeled albumin without altering its post-translational degradation rate. These results suggest that TGF-beta generated from SCs facilitates the development of liver cirrhosis not only by inducing the production of fibrotic components from SCs, but also by impairing the function of the surrounding PCs.