We have previously shown in transgenic mice that transforming growth factor (TGF)-α dramatically enhances c-myc-induced hepatocarcinogenesis by promoting proliferation and survival of hepatocellular carcinoma (HCC) cells. As transgenic livers display increased levels of mature TGF-β1 from the early stages of hepatocarcinogenesis, we have now assessed whether impairment of TGF-β1 signaling contributes to the deregulation of cell cycle progression and apoptosis observed during this process. Focal preneoplastic lesions lacking expression of TGF-β receptor type II (TβRII) were detected in c-myc/TGF-α but not in c-myc livers. In c-myc/TGF-α mice, 40% (2/5) of adenomas and 90% (27/30) of HCCs showed down-regulation of TβRII expression in comparison with 11% (2/18) of adenomas and 47% (14/30) of HCCs in c-myc mice. Down-regulation of the TGF-β1-inducible p15(INK4B) mRNA and reduced apoptotic rates in TβRII-negative HCCs further indicated the disruption of TGF-β1 signaling. Furthermore, both TβRII-negative and -positive c-myc TGF- α HCCs, but not c-myc HCCs, were characterized by decreased levels of the cell cycle inhibitor p27. These results suggest 1) an inverse correlation of decreased p27 expression with the particularly strong expression of TGF-α in these lesions, consistent with the capacity of TGF-α signaling to post- transcriptionally regulate p27, and 2) the presence of alternative, downstream defects of TGF-β1 signaling in c-myc/TGF-α HCCs that may impair the growth-inhibitory response to TGF-β1. Thus, the accelerated neoplastic development in c-myc/TGF-α mice is associated with an early and frequent occurrence of TβRII-negative lesions and with reduced levels of p27 in HCC cells, indicating that disruption of TGF-β1 responsiveness may play a crucial role in the enhancement of c-myc-induced hepatocarcinogenesis by TGF- α.