Many studies suggested that cyclin-dependent kinase inhibitor (CDKI) p21 acts as a universal inhibitor of cyclin/CDK catalytic activity. This protein has also been shown to be a component of active cyclin/CDK complexes. In addition, it has recently been suggested that p21 serves as an assembly factor in platelet-derived growth factor (PDGF)-stimulated vascular smooth muscle cells (VSMC). However, little is known concerning the molecular mechanisms by which PDGF induces p21 gene expression in VSMC. In this report we demonstrate that PDGF induces the p21 expression at both the mRNA and protein levels. This increase in p21 gene expression was due to activation of the p21 promoter by PDGF. Through both deletion and mutation analysis of the p21 promoter, we defined a 10-bp sequence that is required for the activation of the p21 promoter by PDGF. In addition, gel shift and supershift assays demonstrated that this PDGF-responsive element binds specifically to the transcription factor Sp1. These results demonstrate that Sp1 mediates PDGF-induced p21 gene expression in VSMC. Moreover, immunoblot and immunoprecipitation analysis showed that the level of hyperphosphorylated retinoblastoma protein (Rb) is increased and the protein is physically associated with Sp1 in PDGF-treated cells, indicating that phosphorylated Rb may play a role in regulating Sp1 to activate p21 expression.