Kruppel-like factor 2 (KLF2) is a member of the KLF family of zinc-finger transcription factors and is involved in maintaining T-cell quiescence, regulating preadipocyte differentiation, endothelial cell function and lung development. We used a tetracycline-inducible system in Jurkat T leukemia cells to study the biological role of KLF2 in cellular growth and differentiation. Our results show that expression of KLF2 inhibits cell growth in autonomously proliferating Jurkat cells. Further, 3H-thymidine uptake assays indicate that KLF2 inhibits DNA synthesis in these cells. Moreover, both activation and inhibitory domains are required for KLF2 to suppress Jurkat cell proliferation. In addition, KLF2 upregulates p21WAF1/CIP1 expression. Additionally, we found that KLF2 upregulates p21WAF1/CIP1 promoter activity in Jurkat, HepG2 and SW480 cells. Our analysis shows that the potential KLF2 responsive elements are located between -124 and -60 of the p21WAF1/CIP1 promoter. The sole CACCC site, a sequence recognized by KLF2, in this region is not the element responsive to KLF2. Finally, we determined that the Sp1-3-binding site is the functional responsive element of KLF2 in the p21WAF1/CIP1 promoter, and we conclude that KLF2 directly regulates p21WAF1/CIP1 expression.