The adenovirus early gene product E1A is a potent stimulator of cellular proliferation, which when overexpressed can overcome the growth-inhibitory effects of the polypeptide hormone transforming growth factor beta (TGF-beta). The ability of TGF-beta to arrest cell growth in G1 correlates with the transcriptional induction of the cyclin-dependent kinase inhibitors, p15/INK4B and p21/WAF1/Cip1; an inhibition of the G1 cyclin-Cdk complexes; and a maintenance of the retinoblastoma susceptibility gene product, Rb, in a hypophosphorylated state. The ability of E1A to overcome TGF-beta-mediated growth inhibition derives, in part, from its ability to sequester Rb and Rb family members. We report here that E1A also acts upstream of Rb by blocking the TGF-beta-mediated induction of p15 and p21. Consistent with these findings, E1A expression also blocks the ability of TGF-beta to inhibit Cdk2 kinase activity, as well as its ability to hold Rb in a hypophosphorylated state. The effect of E1A on the induction of p15 and p21 is independent of E1A's Rb binding activity. The E1A-mediated decrease in p15 levels is primarily the result of a block at the level of transcriptional activation by TGF-beta. This effect is dependent on E1A's ability to bind p300, one of E1A's target proteins. Thus, the ability of E1A to affect p15 and p21 expression represents an additional possible mechanism by which E1A can circumvent the negative regulation of cell cycle progression.