Human peripheral blood monocytes and neutrophils secrete TGF‐beta. Activation of monocytes with LPS stimulates the secretion of TGF‐beta; however, the production of TGF‐beta by neutrophils was not altered by treatment with LPS. The secreted TGF‐beta appears to be in a fully active form since acid treatment of the conditioned medium does not increase the amount of TGF‐beta activity. TGF‐beta 1 transcripts were detected at similar levels in both activated and nonacti‐vated monocytes and neutrophils, suggesting that the increase in TGF‐beta secretion after activation of monocytes is regulated by a posttranscriptional mechanism. Western blot analysis with anti‐N‐terminal TGF‐beta 1 peptide antibodies indicate the leukocyte‐derived TGF‐beta is beta 1. In addition, TGF‐beta 1 transcripts were detected in rat peritoneal macrophages and in a differentiating human hematopoietic tumor cell line (HEL). The ability of inflammatory cells such as monocytes and neutrophils to produce TGF‐beta may play an important role in the function of these cells in wound repair, in the immune response, and in the pathogenesis of fibrotic diseases.