Chronic bronchitis frequently leads to irreversible airway obstruction. Alteration of airway architecture with abnormal airway connective tissue is thought to play an important role in this process. We hypothesized that the epithelial cells that line the airways modulate the development of peribronchial fibrosis and fixed airway obstruction by directing fibroblast proliferation. To assess this, we examined stimulatory activities for human lung fibroblast proliferation in bovine bronchial epithelial cell-conditioned medium. The conditioned medium stimulated the proliferation of fibroblasts in a serum-free culture system in a concentration-dependent manner. The fibroblast growth stimulatory activity was heterogenous, with molecular masses of > 50 and approximately 10 kDa. Bronchial epithelial cell-conditioned medium also contained fibroblast growth inhibitory factors, including both transforming growth factor (TGF)-beta and, based on indomethacin sensitivity, cyclooxygenase products. TGF-beta appeared to contribute to the morphological change of fibroblasts induced by the conditioned medium. Co-culture of human lung fibroblasts with bronchial epithelial cells resulted in a stimulation of fibroblast proliferation. In summary, airway epithelial cells appear to regulate fibroblast proliferation and may play a role in peribronchial fibrosis in chronic bronchitis.