Transforming growth factor beta (TGF-beta) induces cell cycle arrest of most nontransformed epithelial cell lines. In contrast, many human carcinomas are refractory to the growth-inhibitory effect of TGF-beta. TGF-beta overexpression inhibits tumorigenesis, and abolition of TGF-beta signaling accelerates tumorigenesis, suggesting that TGF-beta acts as a tumor suppressor in mouse models of cancer. A screen to identify agents that potentiate TGF-beta-induced growth arrest demonstrated that the potential anticancer agent rapamycin cooperated with TGF-beta to induce growth arrest in multiple cell lines. Rapamycin also augmented the ability of TGF-beta to inhibit the proliferation of E2F1-, c-Myc-, and (V12)H-Ras-transformed cells, even though these cells were insensitive to TGF-beta-mediated growth arrest in the absence of rapamycin. Rapamycin potentiation of TGF-beta-induced growth arrest could not be explained by increases in TGF-beta receptor levels or rapamycin-induced dissociation of FKBP12 from the TGF-beta type I receptor. Significantly, TGF-beta and rapamycin cooperated to induce growth inhibition of human carcinoma cells that are resistant to TGF-beta-induced growth arrest, and arrest correlated with a suppression of Cdk2 kinase activity. Inhibition of Cdk2 activity was associated with increased binding of p21 and p27 to Cdk2 and decreased phosphorylation of Cdk2 on Thr(160). Increased p21 and p27 binding to Cdk2 was accompanied by decreased p130, p107, and E2F4 binding to Cdk2. Together, these results indicate that rapamycin and TGF-beta cooperate to inhibit the proliferation of nontransformed cells and cancer cells by acting in concert to inhibit Cdk2 activity.