The oncogene c-myc and transforming growth factor (TGF) α are frequently coexpressed in human cancers, suggesting that their interaction may be a critical step in malignant growth. Consistent with this idea, we recently demonstrated in a transgenic mouse model that TGF-α dramatically enhances c-myc-induced hepatocarcinogenesis. To elucidate this synergistic effect, we have now investigated regulation of cell cycle and apoptosis during neoplastic development in the liver of c-myc and c-myc/TGFα transgenic mice. Both lines displayed dramatic increases of mitotic and apoptotic rates before the onset of hepatocellular carcinoma (HCC), but only c-myc/TGF-α livers showed significantly levels of net proliferation (mitosis minus apoptosis). Subsequently, mitosis declined in peritumorous tissues, concomitant with the previously reported induction of TGF-β1, whereas c-myc and c-myc/TGFα HCCs maintained mitotic hyperactivity. The c-myc/TGF-α HCCs were also characterized by a particularly strong expression of TGF-α and very low apoptotic index in contrast to high levels of apoptosis in peritumorous tissues and c-myc HCCs. The differential levels of cell proliferation in noncancerous and cancerous tissues correlated with a stronger induction of cyclin D1 mRNA and protein in c-myc/TGF-α and c-myc HCCs associated with intense pRb hyperphosphorylation. Severe deregulation of G₁-S transition was also indicated by the dramatic up-regulation, particularly in the HCCs, of pRb-free E2F1-DP1 and E2F2-DP1 transcription factor heterodimers, as assessed by immunoprecipitation and immunohistochemistry. The existence of increased E2F activity during hepatocarcinogenesis was further indicated by the transcriptional induction of putative E2F target genes involved in cell cycle progression, such as endogenous c-myc, cyclin A, Cdc2, and E2F itself. Cdc2 overexpression and the elevated mitotic indices in the HCCs correlated also with induction of cyclin B steady-state levels. The data suggest that coexpression of c-myc and TGF-α leads to a selective growth advantage for hepatic (pre)neoplastic cells by disrupting the pRb/E2F pathway and by TGF-α-mediated reduction of apoptosis.