Tumor progression due to loss of autocrine negative transforming growth factor-beta (TGF-beta) activity was reported in various cancers of epithelial origin. Estrogen receptor expressing (ER(+)) breast cancer cells are refractory to TGF-beta effects and exhibit malignant behavior due to loss or inadequate expression of TGF-beta receptor type II (RII). The exogenous TGF-beta effects on the modulation of cell cycle machinery were analyzed previously. However, very little is known regarding the endogenous control of cell cycle progression by autocrine TGF-beta. In this study, we have used a tetracycline regulatable RII cDNA expression vector to demonstrate that RII replacement reconstitutes autocrine negative TGF-beta activity in ER(+) breast cancer cells as evidenced by the delayed entry into S phase by the RII transfectants. Reversal of the delayed entry into S phase by the RII transfectants in the presence of tetracycline in addition to the decreased steady state transcription from a promoter containing the TGF-beta responsive element (p3TP-Lux) by TGF-beta neutralizing antibody treatment of the RII transfected cells confirmed that autocrine-negative TGF-beta activity was induced in the transfectants. Histone H1 kinase assays indicated that the delayed entry of RII transfectants into phase was associated with markedly reduced cyclin-dependent kinase (CDK)2 kinase activity. This reduction in kinase activity was due to the induction of CDK inhibitors p21/waf1/cip1 and p27/kip, and their association with CDK2. Tetracycline treatment of RII transfectants led to the suppression of p21/waf1/cip1and p27/kip expression, thus, directly demonstrating induction of CDK inhibitors by autocrine TGF-beta leading to growth control of ER(+) breast cancer cells.