We have previously shown in transgenic mice that transforming growth factor (TGF)-alpha dramatically enhances c-myc-induced hepatocarcinogenesis by promoting proliferation and survival of hepatocellular carcinoma (HCC) cells. As transgenic livers display increased levels of mature TGF-beta1 from the early stages of hepatocarcinogenesis, we have now assessed whether impairment of TGF-beta1 signaling contributes to the deregulation of cell cycle progression and apoptosis observed during this process. Focal preneoplastic lesions lacking expression of TGF-beta receptor type II (TbetaRII) were detected in c-myc/TGF-alpha but not in c-myc livers. In c-myc/TGF-alpha mice, 40% (2/5) of adenomas and 90% (27/30) of HCCs showed down-regulation of TbetaRII expression in comparison with 11% (2/18) of adenomas and 47% (14/30) of HCCs in c-myc mice. Down-regulation of the TGF-beta1-inducible p15(INK4B) mRNA and reduced apoptotic rates in TbetaRII-negative HCCs further indicated the disruption of TGF-beta1 signaling. Furthermore, both TbetaRII-negative and -positive c-myc TGF-alpha HCCs, but not c-myc HCCs, were characterized by decreased levels of the cell cycle inhibitor p27. These results suggest 1) an inverse correlation of decreased p27 expression with the particularly strong expression of TGF-alpha in these lesions, consistent with the capacity of TGF-alpha signaling to post-transcriptionally regulate p27, and 2) the presence of alternative, downstream defects of TGF-beta1 signaling in c-myc/TGF-alpha HCCs that may impair the growth-inhibitory response to TGF-beta1. Thus, the accelerated neoplastic development in c-myc/TGF-alpha mice is associated with an early and frequent occurrence of TbetaRII-negative lesions and with reduced levels of p27 in HCC cells, indicating that disruption of TGF-beta1 responsiveness may play a crucial role in the enhancement of c-myc-induced hepatocarcinogenesis by TGF-alpha.