Transforming growth factor-beta (TGF-beta) inhibits cell cycle progression of many types of human cells by arresting them in the G1 phase of the cell cycle. The arrest is mediated through interactions of various cyclin-dependent protein kinases (CDKs) and their inhibitors. We demonstrate that treatment with TGF-beta induces increased levels of WAF1/Cip1/p21, a potent inhibitor of various cyclin-CDK kinase activities, in two colon cancer cell lines (LS1034 and LS513), which are sensitive to TGF-beta-induced growth arrest. The induction in at least one of these cell lines (LS1034,p53-) is p53-independent. No WAF1 induction was observed after TGF-beta treatment in a third cell line (HT-29), which is completely insensitive to the cytoinhibitory effect of TGF-beta. In both LS513 and LS1034, WAF1 induction correlated with reduced cyclin E-associated kinase activity in vitro and suppression of the retinoblastoma susceptibility gene (Rb) protein phosphorylation in vivo. In addition, WAF1 was physically associated with cyclin E in the two sensitive cell lines. These results suggest that WAF1/Cip1/p21 is a mediator of cellular sensitivity to TGF-beta.