Transforming growth factor (TGF)-beta1 functions as a tumor suppressor in vivo. Using transgenic mice, we show that hepatic TGF-beta1 overexpression inhibits abundance of the cyclin-dependent kinase activating tyrosine phosphatase cdc25A protein. The reduction in cdc25A protein levels was associated with increased binding of histone deacetylase 1 to p130 in the hepatic extracts. In cultured cells, HDAC1/p130 overexpression inhibited activity of the cdc25A promoter through an E2F site. TGF-beta1 treatment enhanced p130 binding to the cdc25A promoter E2F site assessed in chromatin immunoprecipitation assays. Hepatic proliferation induced by partial hepatectomy was associated with a decrease in the amount of HDAC1 bound to p130, without a significant decrease in p130 abundance, suggesting that HDAC1 binding to p130 may be regulated by proliferative stimuli. The induction of cdc25A abundance induced by partial hepatectomy correlated with the induction of DNA synthesis. These studies suggest that TGF-beta1 may enhance HDAC1 binding to p130 in vivo, thereby inhibiting cdc25A gene expression. TGF-beta1 regulation of HDAC1/pocket protein associations may provide a link between chromatin remodeling proteins and cdk inhibition through induction of cdc25A in vivo.