N-WASP is a cytoplasmic molecule mediating Arp2/3 nucleated actin polymerization. Mice with a keratinocyte-specific deletion of the gene encoding N-WASP showed normal interfollicular epidermis, but delayed hair-follicle morphogenesis and abnormal hair-follicle cycling, associated with cyclic alopecia and prolonged catagen and telogen phases. The delayed anagen onset correlated with an increased expression of the cell-cycle inhibitor p21CIP, and increased activity of the TGFbeta pathway, a known inducer of p21CIP expression. Primary N-WASP-null keratinocytes showed reduced growth compared with control cells and enhanced expression of the gene encoding the cell-cycle inhibitor p15INK4B, a TGFbeta target gene. Inhibition of TGFbeta signaling blocked overexpression of p15INK4B and restored proliferation of N-WASP-deficient keratinocytes in vitro. However, induction of N-WASP gene deletion in vitro did not result in obvious changes in TGFbeta signaling or growth of keratinocytes, indicating that the in vivo environment is required for the phenotype development. These data identify the actin nucleation regulator N-WASP as a novel element of hair-cycle control that modulates the antiproliferative and pro-apoptotic TGFbeta pathway in keratinocytes in vivo and in vitro.