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We sought to establish a blood-neural barrier (BNB) model of astrocyte contact with endothelial cells (EC) to test the hypothesis that transforming growth factor beta (TGF beta) promotes an EC barrier-phenotype. Astrocyte-EC contact induced BNB properties in EC. Transendothelial resistance was augmented by direct contact between astrocytes-EC, but not by astrocyte-conditioned medium or astrocyte-EC coculture conditioned medium. Coculture of EC and astrocytes led to significant increase in endothelial occludin levels and junctional localization. EC gamma-glutamyl-transferase (GGT) activity was increased by direct contact with astrocytes, by conditioned medium from cocultures or by TGF beta1. Coculture inhibited EC proliferation with no effect on astrocyte proliferation. A neutralizing antibody to TGF beta decreased GGT activity in cocultures and increased cell number. Whereas total TGF beta was not significantly altered by coculture, activated TGF beta increased in astrocyte-EC cocultures. In summary, astrocyte-EC contact induces BNB characteristics in EC and locally activated TGF beta is responsible for part of the induction.