During early cardiac morphogenesis, outflow tract (OT) and atrio‐ventricular (AV) endothelial cells differentiate into mesenchymal cells, which have characteristics of smooth muscle‐like myofibroblasts, and which form endocardial cushion tissue, the primordia of valves, and septa in the adult heart. During this embryonic event, transforming growth factor β3 (TGFβ3) is an essential element in the progression of endothelial‐transformation into mesenchyme. TGFβs are known to be a potent inducer for mesodermal differentiation and a promoter for differentiation of endothelial cells into smooth muscle‐like cells. Using a monoclonal antibody against smooth muscle‐specific alpha‐actin (SMA), we examined the immunohistochemical staining of this form of actin in avian endocardial cushion tissue formation. To determine whether TGFβ3 initiates the expression of SMA, the pre‐migratory AV endothelial monolayer was cultured with or without chicken recombinant TGFβ3 and the expression of SMA was examined immunochemically. Migrating mesenchymal cells expressed SMA beneath the cell surface membrane. These cells showed a reduction of endothelial specific marker antigen, QH1. Stationary endothelial cells did not express SMA. The deposition of SMA in the mesenchymal tissue persisted until the end of the fetal period. Pre‐migratory endothelial cells cultured in complete medium (CM199) that contained TGFβ3 expressed SMA, whereas cells cultured in CM199 alone did not. At the onset of the endothelial‐mesenchymal transformation, migrating mesenchymal cells express SMA and the expression of this form of actin is upregulated by TGFβ3. The induction of the expression of SMA by TGFβ3 is one of the initial events in the cytoskeletal reorganization in endothelial cells which separate from one another during the initial phenotypic change associated with the endothelial‐mesenchymal transformation. Dev. Dyn. 209:296–309, 1997. © 1997 Wiley‐Liss, Inc.