Transforming growth factor (TGF)-β₁ is an essential regulatory cytokine that has been implicated in the pathogenesis of diverse facets of the injury and repair responses in the lung. The types of responses that it elicits can be appreciated in studies from our laboratory that demonstrated that the transgenic (Tg) overexpression of TGF-β₁ in the murine lung causes epithelial apoptosis followed by fibrosis, inflammation, and parenchymal destruction. Because a cyclin-dependent kinase inhibitor, p21, is a key regulator of apoptosis, we hypothesized that p21 plays an important role in the pathogenesis of TGF-β₁–induced tissue responses. To test this hypothesis we evaluated the effect of TGF-β₁ on the expression of p21 in the murine lung. We also characterized the effects of transgenic TGF-β₁ in mice with wild-type and null mutant p21 loci. These studies demonstrate that TGF-β₁ is a potent stimulator of p21 expression in the epithelial cells and macrophages in the murine lung. They also demonstrate that TGF-β₁–induced lung inflammation, fibrosis, myofibroblast accumulation, and alveolar destruction are augmented in the absence of p21, and that these alterations are associated with exaggerated levels of apoptosis and caspase-3 activation. Finally, our studies further demonstrated that TGF-β₁ induces p21 via a TNF-α–signaling pathway and that p21 is a negative modulator of TGF-β₁–induced TNF-α expression. Collectively, our studies demonstrate that p21 regulates TGF-β₁–induced apoptosis, inflammation, fibrosis, and alveolar remodeling by interacting with TNF-α–signaling pathways.