Transforming growth factor beta (TGF-beta) was found to inhibit differentiation of myogenic cells only when they were grown to high density. Inhibition also occurred when myogenic cells were cocultured with other types of mesenchymal cells but not when they were cocultured with epithelial cells. It is therefore possible that some density-dependent signaling mediates the intracellular response to TGF-beta. Within 30 min of treatment, TGF-beta induced translocation of MEF2, but not MyoD, myogenin, or p21, to the cytoplasm of myogenic cells grown to high density. Translocation was reversible on withdrawal of TGF-beta. By using immune electron microscopy and Western blot analysis on subcellular fractions, MEF2 was shown to be tightly associated with cytoskeleton membrane components. To test whether MEF2 export from the nucleus was causally related to the inhibitory action of TGF-beta, we transfected C2C12 myoblasts with MEF2C containing the nuclear localization signal of simian virus 40 large T antigen (nlsSV40). Myogenic cells expressing the chimerical MEF2C/nlsSV40, but not wild-type MEF2C, retained this transcription factor in the nucleus and were resistant to the inhibitory action of TGF-beta. We propose a mechanism in which the inhibition of myogenesis by TGF-beta is mediated through MEF2 localization to the cytoplasm, thus preventing it from participating in an active transcriptional complex.