Mutations in the adenomatous polyposis coli (APC) tumour-suppressor gene occur in most human colon cancers. Loss of functional APC protein results in the accumulation of beta-catenin. Mutant forms of beta-catenin have been discovered in colon cancers that retain wild-type APC genes, and also in melanomas, medulloblastomas, prostate cancer and gastric and hepatocellular carcinomas. The accumulation of beta-catenin activates genes that are responsive to transcription factors of the TCF/LEF family, with which beta-catenin interacts. Here we show that beta-catenin activates transcription from the cyclin D1 promoter, and that sequences within the promoter that are related to consensus TCF/LEF-binding sites are necessary for activation. The oncoprotein p21ras further activates transcription of the cyclin D1 gene, through sites within the promoter that bind the transcriptional regulators Ets or CREB. Cells expressing mutant beta-catenin produce high levels of cyclin D1 messenger RNA and protein constitutively. Furthermore, expression of a dominant-negative form of TCF in colon-cancer cells strongly inhibits expression of cyclin D1 without affecting expression of cyclin D2, cyclin E, or cyclin-dependent kinases 2, 4 or 6. This dominant-negative TCF causes cells to arrest in the G1 phase of the cell cycle; this phenotype can be rescued by expression of cyclin D1 under the cytomegalovirus promoter. Abnormal levels of beta-catenin may therefore contribute to neoplastic transformation by causing accumulation of cyclin D1.