The AP-1 transcription factor is activated by oncogenic signal transduction cascades and its function is critical for both mitogenesis and carcinogenesis. To define the role of AP-1 in the context of a human fibrosarcoma cell line, HT1080, we expressed a dominant negative c-jun mutant fused to the green fluorescent protein in an ecdysone-inducible system. We demonstrated that high levels of this mutant, GFP-TAM67, inhibit AP-1 activity and arrest cells predominantly in the G1 phase of the cell cycle. This arrest is reversible and occurs only above a threshold concentration; low to moderate levels of GFP-TAM67 are insufficient for growth arrest. Contrary to expectations based on the literature, GFP-TAM67 does not inhibit expression of cyclin D1, cyclin E, or their respective cyclin-dependent kinases. However, pRB is hypophosphorylated in GFP-TAM67-arrested cells and the activity of both the cyclin D1:cdk and the cyclin E:cdk complexes are impaired. Both of these complexes show an increased association with p21(CIP1/WAF1), concomitantly with induction of the p21 mRNA by GFP-TAM67. These results suggest a novel function of AP-1 in the activation of the G1 cyclin:cdk complexes in human tumor cells by regulating the expression of the p21(CIP1/WAF1) gene.