Progranulin is a 593-amino acid glycoprotein, the mRNA of which is expressed by many epithelial cells both in vitro and in vivo, but the biological significance of this expression is unclear. In this study, we demonstrate that overexpression of the progranulin gene in SW-13 adrenal carcinoma cells and MDCK nontransformed renal epithelia results in the transfection-specific secretion of progranulin, acquired clonogenicity in semisolid agar, and increased mitosis in monolayer culture, whereas diminution of progranulin gene expression impairs growth of these cells. Purified recombinant progranulin reproduces the effects of forced progranulin expression, being clonogenic in soft agar and mitogenic in monolayer culture to SW-13 and MDCK cells and other epithelia of various origins such as GPC16 colonic epithelium and A549 lung carcinoma cells. Progranulin overproduction in SW-13 cells markedly increases its tumorigenicity in nude mice, demonstrating that it can regulate epithelial proliferation in vivo. We propose that the rate of growth for some epithelia, such as SW-13 and MDCK, is proportional to the level of intrinsic progranulin gene expression, and that elevated progranulin gene expression confers a transformed phenotype on epithelial cells including anchorage independence in vitro and growth as tumors in nude mice.