TGFβ mediates cell cycle arrest in late G 1 phase of the cell cycle with a simultaneous peak in the levels of the cyclin-dependent kinase inhibitor, p27 kip1 (p27). In this report, we show that whereas p27 resides in the cytoplasm in the endometrial carcinoma (ECA) cell line HEC-1A, TGFβ increases the total levels and translocation of p27 into the nucleus. Concomitantly, TGFβ activates the transcription factors Smad2 and Smad3, inhibits proliferation, and blocks Cdk2 activity; all these events are blocked by an inhibitor of TβRI serine kinase activity (SD208). In addition, we show that inhibiting p27 transcription with a specific siRNA completely blocks TGFβ-mediated growth inhibition in these cells. These data suggest that TGFβ inhibits cellular proliferation by increasing p27 levels through Smad2/3 signaling in HEC-1A cells. We further show that TGFβ decreases the levels of components of the SCF Skp2 targeting complex for ubiquitin-mediated degradation of p27 in proteasomes, at the protein but not the mRNA level. Therefore, TGFβ accumulates nuclear p27 by preventing its degradation to enable G 1 arrest in HEC-1A cells. Importantly, these data suggest a novel mechanism for TGFβ/Smad mediated growth inhibition that might be inoperable in the numerous human cancers demonstrating early dysregulated TGFβ signaling and loss of growth inhibition. The TGFβ/p27 axis might provide novel therapeutic targets for cancer.