Appropriate transforming growth factor-beta1 (TGF-beta1) signaling is required to preserve homeostasis of diverse tissues during development. At the cellular level, one function of TGF-beta1 that is critical for preserving homeostasis is the ability to arrest cell growth. TGF-beta1 arrests growth by blocking the function of the c-myc proto-oncogene. c-myc function is determined by the level of c-myc expression relative to other Max-interacting transcription factors, and TGF-beta1 has been shown to inhibit c-myc expression by inhibiting c-myc transcription. However, whether TGF-beta1 might also increase the expression of a Max-interacting factor that blocks myc function by competing with myc for Max binding is not known. Therefore, we determined the effect of TGF-beta1 on the expression of Max-interacting transcription factors in Balb/MK cells. We found unexpectedly that Balb/MK cells express both N-myc and c-myc. The pattern of N-myc expression during the cell cycle differs from that of c-myc, indicating that mRNA accumulation is controlled by mechanisms specific to each gene. TGF-beta1 rapidly inhibits N-myc mRNA expression; thus N-myc is a novel target of TGF-beta1 in Balb/MK cells. More importantly, we found that TGF-beta1 induces the expression of the putative tumor suppressor genes Mad4 and Mxi1 in both the Balb/MK and Mv1Lu cell lines. Mad4 and Mxi1 are novel targets of TGF-beta1, known to inhibit cell growth by antagonizing the interaction of Myc with Max. Thus, our results suggest that the induction of Mad4 and Mxi1 may function in tandem with the inhibition of N-myc and c-myc to mediate the growth inhibitory function of TGF-beta1.