Cytokines and growth factors play critical roles in normal homeostasis of immune functions. TGF-?1 is the dominant regulator of inflammatory responses. We have earlier generated TGF-?1-/- mice that exhibit multifocal inflammation associated with increased adhesion of leukocytes to endothelium, aberrant expression of MHC class-I and -II antigens, and autoimmune manifestations similar to Sjogren syndrome. Moreover, depletion of CD8 cells ameliorated health status of TGF-?1 null mice. To delineate role of TGF-?1 in aberrant MHC expression, TGF-?1 null mice were generated in the MHC-I and MHC-II deficient backgrounds. TGF-?1 X MHC-I null mice exhibit increased longevity associated with reduced inflammation, diminished autoimmune manifestations and significantly elevated myelopoiesis. Although the TGF-?1 X MHC-II mice exhibited lack of inflammation and autoimmune response, they showed neonatal mortality associated with increased myelopoiesis and metaplasia. These results indicate a dominant role of TGF-?1 in leukocyte maturation and function. To assess the therapeutic potential of circulating levels of active TGF-?1, we generated mice with endocrine expression of active TGF-?1 on a TGF-?1 null background (TGF-?1(-/-/TG)) by crossing TGF-?1(+/-) mice with transgenic mice (TG) that express recombinant TGF-?1 specifically in the liver and secrete it in the blood. The TGF-_1(-/-/TG) mice exhibit a survival profile similar to the TGF-?1 (-/-) mice indicating a failure to rescue the lethal phenotype. However, serum TGF-?1 levels in theTGF-?1 (-/-/TG) mice were restored to normal levels with expression in all the tissues notably in the kidney and spleen. Histopathology showed reduced inflammation in all target tissues, especially in the heart. Interestingly unlike TGF-? (-/-) mice, the TGF-?1(-/-/TG) mice have glomerulonephritis in their kidneys similar to the TG mice. Thus, the phenotype of TGF-?1 (-/-/TG) animal model indicates the potential role of circulating active-TGF-_1 in reducing inflammation, but its failure to rescue lethality in TGF-_1 null mice indicates a critical role of autocrine TGF-?1. The studies were also carried out to develop animal model to characterize the role of the TGF-? signaling pathway in squamous cell carcinoma (SCC) and test it for the cytokine receptor-directed cytotoxin therapy. Mice with the TGF-? receptor RI locus flanked with loxP sites were crossed with the neurofilament-H (NF-H) Cre mouse line 7 to generate TGF-? RI conditional knockout (COKO) mice. Tumors from the COKO mice were processed either for histological analysis or for establishing primary cell cultures using standard procedures. Recombinant IL-13 receptor-directed cytotoxin was expressed in E. coli and the purified material was used for cytotoxicity assays on SCC primary cell cultures. Twenty percent of the 6-month old COKO mice developed tumors located in either the head and neck or the perianal region. The tumor burden increased with age. Tumors were typical SCC: their cells stained positive for keratinocyte markers and were surrounded by unusually large clusters of Merkel cells. Similar to human SCC tumor cell lines, some SCC primary cultures derived from COKO mice were highly sensitive to the cytotoxic effects of IL-13 receptor- directed cytotoxin. The targeted deletion of TGF-? signaling in the neuronal cells populating both the central and peripheral nervous system led to SCC tumors in the head and neck, and the perianal regions. These regions are rich in Merkel cells and their abnormal clustering around the tumors indicate their potential involvement in SSC in COKO mice. Approximately 30% of human SCC tumors are known to express high levels of IL-13 receptors and are highly sensitive to IL-13 cytotoxin. Since SCC cells derived from COKO mice exhibit similar unique characteristics, these mice may be a suitable animal model for studying receptor-directed cytotoxin therapy.