The epithelium of the gastrointestinal tract transports ions and water but excludes luminal microorganisms and toxic molecules. The factors regulating these important functions are not fully understood. Intestinal myofibroblasts lie subjacent to the basement membrane, at the basal surface of epithelial cells. We recently showed that primary cultures of adult human colonic subepithelial myofibroblasts express cyclooxygenase (COX)-1 and COX-2 enzymes and release bioactive transforming growth factor-beta (TGF-beta). In this study we have investigated the role of normal human colonic subepithelial myofibroblasts in the regulation of transepithelial resistance and secretory response in HCA-7 and T84 colonic epithelial cell lines. Cocultures of epithelial cells-myofibroblasts and medium conditioned by myofibroblasts enhanced transepithelial resistance and delayed mannitol flux. A panspecific antibody to TGF-beta (but not piroxicam) antagonized this effect. In HCA-7 cells, myofibroblasts downregulated secretagogue-induced change in short-circuit current, and this effect was reversed by pretreatment of myofibroblasts with piroxicam. In contrast to HCA-7 cells, myofibroblasts upregulated the agonist-induced secretory response in T84 cells. This study shows that intestinal subepithelial myofibroblasts enhance barrier function and modulate electrogenic chloride secretion in epithelial cells. The enhancement of barrier function was mediated by TGF-beta. In contrast, the modulation of agonist-induced change in short-circuit current was mediated by cyclooxygenase products. These findings suggest that colonic myofibroblasts regulate important functions of epithelial cells via distinct secretory products.