Although TGF-beta1, a growth inhibitor, is known to also induce apoptosis, the molecular mechanism of this apoptosis is largely undefined. Here, we identify the mechanism of TGF-beta1-induced apoptosis in SNU-16 human gastric cancer cells. Cell cycle and TUNEL analysis showed that, upon TGF-beta1 treatment, cells were initially arrested at the G1 phase and then driven into apoptosis. Of note, caspase-3 was activated in accordance with TGF-beta1-induced G1 arrest. Activated caspase-3 is targeted to cleave p21(cip1), p27(kip1), and Rb, which play important roles in TGF-beta-induced G1 arrest, into inactive fragments. Subsequently, Cdk2 was aberrantly activated due to the cleavage of p21 and p27. We found that the inhibition of Cdk2 activity efficiently blocks TGF-beta1-induced apoptosis, whereas it did not prevent caspase-3 activation or the subsequent cleavage of target proteins. In contrast, the suppression of caspase-3 activity inhibited the cleavage of target proteins, the activation of Cdk2, and the induction of apoptosis. Taken together, our results suggest that activation of caspase-3 by TGF-beta1 may initiate the conversion from G1 cell cycle arrest to apoptosis via the cleavage of p21, p27 and Rb, which in turn causes Cdk2 activation and, most significantly, Cdk2 activation as a downstream effector of caspase is a critical step for the execution of TGF-beta1-induced apoptosis.