Hepatocellular carcinoma often develops in the setting of abnormal hepatocyte growth associated with chronic hepatitis and liver cirrhosis. Transforming growth factor β (TGFβ) is a multifunctional cytokine pivotal in the regulation of hepatic cell growth, differentiation, migration, extracellular matrix production, stem cell homeostasis, and hepatocarcinogenesis. However, the mechanisms by which TGF-β influences hepatic cell functions remain incompletely defined. We report herein that TGF-β regulates the growth of primary and transformed hepatocytes through concurrent activation of Smad and phosphorylation of cytosolic phospholipase A2α (cPLA2α), a rate-limiting key enzyme that releases arachidonic acid for the production of bioactive eicosanoids. The interplays between TGF-β and cPLA2α signaling pathways were examined in rat primary hepatocytes, human hepatocellular carcinoma cells, and hepatocytes isolated from newly developed cPLA2α transgenic mice. Conclusion: Our data show that cPLA2α activates peroxisome proliferator-activated receptor γ (PPAR-γ) and thus counteracts Smad2/3-mediated inhibition of cell growth. Therefore, regulation of TGF-β signaling by cPLA2α and PPAR-γ may represent an important mechanism for control of hepatic cell growth and hepatocarcinogenesis. Copyright © 2010 by the American Association for the Study of Liver Diseases.