The c-jun proto-oncogene encodes a component of the mitogern-inducible immediate-early transcription factor AP-1 and has been implicated as a positive regulator of cell proliferation and G(1)-to-S-phase progression. Here we report that fibroblasts derived from c-jun(-/-) mouse fetuses exhibit a severe proliferation defect and undergo a prolonged crisis before spontaneous immortalization. The cyclin D1- and cyclin E-dependent kinases (CDKs) and transcription factor E2F are poorly activated, resulting in inefficient G(1)-to-S-phase progression. Furthermore, the absence of c-Tun results in elevated expression of the tumor suppressor gene pr53 and its target gene, the CDK inhibitor g21, whereas overexpression of c-Tun represses p53 and p21 expression and accelerates cell proliferation. Surprisingly, protein stabilization, the common mechanism of p53 regulation, is not involved in up-regulation of p53 in c-jun(-/-) fibroblasts. Rather, c-Tun regulates transcription of p53 negatively by direct binding to a variant AP-1 site in the p53 promoter. Importantly, deletion of g53 abrogates all defects of cells lacking c-Tun in cell cycle progression, proliferation, immortalization, and activation of G(1) CDKs and E2F. These results demonstrate that an essential, rate-limiting function of c-Tun in fibroblast proliferation is negative regulation of p53 expression, and establish a mechanistic link between c-Tun-dependent mitogenic signaling and cell-cycle regulation.