Mouse trophoblast stem (TS) cells can be grown indefinitely in vitro with FGF4 and embryonic fibroblast conditioned media (EFCM). Here, we report that the active protein components of EFCM include TGF-beta and the related factor activin, and that long-term continuous TS cell proliferation is possible in media supplemented with only serum, FGF4, and TGF-beta. As trophoblasts are an epithelial cell type, the promotion of TS cell proliferation represents an unusual function for TGF-beta and activin since TGF-beta in particular is well known as an inhibitor of nontransformed epithelial cell proliferation. Our data suggest that constitutive FGF signaling in TS cells selectively inhibits the ability of TGF-beta to repress c-myc expression, a central component of the TGF-beta cytostatic transcriptional response previously observed to be lost in other epithelial cell types upon oncogenic Ras transformation.