TGF-beta 1 controls the expression of numerous genes, including early response and cellular matrix genes. However, the signal-transducing mechanism underlying this regulation of gene expression is not fully understood. In this study, we investigated whether redox regulation plays a role in the TGF-beta 1 signal transduction in the mouse osteoblastic cell line (MC3T3-E1). The overall intracellular oxidized state of the cells, when measured using 2',7'-dichlorofluorescin diacetate by laser-scanning confocal microscopy, was increased transiently after the addition of TGF-beta 1. This increase was abolished by the addition of oxygen radical scavengers such as catalase and N-acetylcysteine. In a variant cell line lacking the TGF-beta 1 receptor, the intracellular oxidized state was not modulated by treatment with TGF-beta 1. We then examined the expression of early growth response-1 (egr-1) gene, which is inducible by TGF-beta 1 and H2O2. Radical scavengers inhibited the induction of egr-1 by TGF-beta 1, but not that by 12-O-tetradecanoylphorbol-13 acetate. A nuclear run-on assay indicated that this inhibition was at the transcriptional level. From transient expression experiments using chloramphenicol acetyltransferase gene linked to serially deleted egr-1 gene 5'-upstream region, the CArG element in the 5' flanking region of egr-1 was identified as an essential sequence in the transcriptional activation for both TGF-beta 1 and H2O2 stimulation. These findings suggest that H2O2 acts as a mediator for the TGF-beta 1-induced transcription of egr-1 gene.