Recently, the anti-tumor activity of N-myc downstream-regulated gene 2 (NDRG2) was elucidated, but the molecular mechanism of how NDRG2 works as a tumor suppressor is not well known. To determine the function of NDRG2 as a tumor suppressor, we established stable cell lines expressing NDRG2 protein or its mutant forms, and studied their effects on tumor cell growth. Interestingly, constitutive expression of wild-type NDRG2 induced the growth retardation of SW620 colon carcinoma cells. Introduction of NDRG2 into SW620 cells induced the decrease of c-Jun phosphorylation at Ser63, followed by the attenuation of activator protein-1 (AP-1) function as a transcriptional activator. Subsequently, the down-regulation of cyclin D1, which is known as a major target for AP-1 transcription activator, resulted in cell cycle arrest at G1/S phase. Additionally, treatment of NDRG2-siRNA on NDRG2-expressing cells has induced the recovery of c-Jun phosphorylation and cyclin D1 expression. Cell proliferation of those cells was also increased compared with untreated cells. NDRG2 mutants of which the phosphorylation sites at C-terminal region were removed by deletion or site-directed mutagenesis have shown no effect on cyclin D1 expression and could not induce cell growth retardation. In conclusion, NDRG2 modulates intracellular signals to control cell cycle through the regulation of cyclin D1 expression via phosphorylation pathway.