Human colon carcinoma cells HCT116 that lack transforming growth factor beta (TGF-beta) type II receptor (RII) demonstrated restoration of autocrine TGF-beta activity upon reexpression of RII without restoring inhibitory responses to exogenous TGF-beta treatment. RII transfectants (designated RII Cl 37) had a longer lag phase relative to NEO-transfected control cells (designated NEO pool) before entering exponential growth in tissue culture. The prolonged growth arrest of RII Cl 37 cells was associated with markedly reduced cyclin-dependent kinase (CDK)2 activity. Our results demonstrate that p21 induction by autocrine TGF-beta is responsible for reduced CDK2 activity, which at least partially contributes to prolonged growth arrest and reduced cell proliferation in RII Cl 37 cells. In contrast to RII transfectants, HCT116 cells transfected with chromosome 3 (designated HCT116Ch3), which bears the RII gene, restored the response to exogenous TGF-beta as well as autocrine TGF-beta activity. Autocrine TGF-beta activity in HCT116Ch3 cells induced p21 expression as seen in RII Cl 37 cells; however, in addition to autocrine activity, HCT116Ch3 cells responded to exogenous TGF-beta as decreased CDK4 expression and reduced pRb phosphorylation mediated a TGF-beta inhibitory response in these cells. These results indicate that autocrine TGF-beta regulates the cell cycle through a pathway different from exogenous TGF-beta in the sense that p21 is a more sensitive effector of the TGF-beta signaling pathway, which can be induced and saturated by autocrine TGF-beta, whereas CDK4 inhibition is a less sensitive effector, which can only be activated by high levels of exogenous TGF-beta