We previously showed that the rate of hepatocyte proliferation in livers from newborn C/EBPalpha knockout mice was increased. An examination of cell cycle-related proteins showed that the cyclin-dependent kinase (CDK) inhibitor p21 level was reduced in the knockout animals compared to that in wild-type littermates. Here we show additional cell cycle-associated proteins that are affected by C/EBPalpha. We have observed that C/EBPalpha controls the composition of E2F complexes through interaction with the retinoblastoma (Rb)-like protein, p107, during prenatal liver development. S-phase-specific E2F complexes containing E2F, DP, cdk2, cyclin A, and p107 are observed in the developing liver. In wild-type animals these complexes disappear by day 18 of gestation and are no longer present in the newborn animals. In the C/EBPalpha mutant, the S-phase-specific complexes do not diminish and persist to birth. The elevation of levels of the S-phase-specific E2F-p107 complexes in C/EBPalpha knockout mice correlates with the increased expression of several E2F-dependent genes such as those that encode cyclin A, proliferating cell nuclear antigen, and p107. The C/EBPalpha-mediated regulation of E2F binding is specific, since the deletion of another C/EBP family member, C/EBPbeta, does not change the pattern of E2F binding during prenatal liver development. The addition of bacterially expressed, purified His-C/EBPalpha to the E2F binding reaction resulted in the disruption of E2F complexes containing p107 in nuclear extracts from C/EBPalpha knockout mouse livers. Ectopic expression of C/EBPalpha in cultured cells also leads to a reduction of E2F complexes containing Rb family proteins. Coimmunoprecipitation analyses revealed an interaction of C/EBPalpha with p107 but none with cdk2, E2F1, or cyclin A. A region of C/EBPalpha that has sequence similarity to E2F is sufficient for the disruption of the E2F-p107 complexes. Despite its role as a DNA binding protein, C/EBPalpha brings about a change in E2F complex composition through a protein-protein interaction. The disruption of E2F-p107 complexes correlates with C/EBPalpha-mediated growth arrest of hepatocytes in newborn animals.