The p53-inducible gene PC3 (TIS21, BTG2) is endowed with antiproliferative activity. Here we report that expression of PC3 in cycling cells induced accumulation of hypophosphorylated, growth-inhibitory forms of pRb and led to G(1) arrest. This latter was not observed in cells with genetic disruption of the Rb gene, indicating that the PC3-mediated G(1) arrest was Rb dependent. Furthermore, (i) the arrest of G(1)-S transition exerted by PC3 was completely rescued by coexpression of cyclin D1 but not by that of cyclin A or E; (ii) expression of PC3 caused a significant down-regulation of cyclin D1 protein levels, also in Rb-defective cells, accompanied by inhibition of CDK4 activity in vivo; and (iii) the removal from the PC3 molecule of residues 50 to 68, a conserved domain of the PC3/BTG/Tob gene family, which we term GR, led to a loss of the inhibition of proliferation as well as of the down-regulation of cyclin D1 levels. These data point to cyclin D1 down-regulation as the main factor responsible for the growth inhibition by PC3. Such an effect was associated with a decrease of cyclin D1 transcript and of cyclin D1 promoter activity, whereas no effect of PC3 was observed on cyclin D1 protein stability. Taken together, these findings indicate that PC3 impairs G(1)-S transition by inhibiting pRb function in consequence of a reduction of cyclin D1 levels and that PC3 acts, either directly or indirectly, as a transcriptional regulator of cyclin D1.