The alveolar surface of the lung is a major target for oxidant injury, and its repair following injury is dependent on the ability of its stem cells, the type 2 cells, to initiate proliferation. From previous studies it is likely that events located before the entry into the S phase of the cell cycle and involving several components of the insulin-like growth factor system as well as of transforming growth factor-beta (TGF-beta) play a key role in growth regulation of oxidant-exposed type 2 epithelial cells. To gain further insights into these mechanisms, we explored the effects of O-2 exposure on G(1) cyclins and their cyclin-dependent kinases (CDKs). We documented an increased expression of these genes in O-2-treated type 2 cells. However, despite this induction, a dramatic decrease in cyclin E-CDK2 activity, but not in cyclin D-CDK4 activity, was found. The concomitant induction of CDK inhibitory proteins (CKIs), mainly p21(CIP1), suggests that accumulation of inactive cyclin E-CDK2 activity is due to CKI binding. We also provided evidence that the mechanisms regulating this process involved TGF-beta as anti-TGF-beta antibody treatment was able to reduce the oxidant-induced inhibition of cyclin E-CDK2 activity, Taken together, these results suggest that oxidants may block entry into S phase by acting on a subset of late G(1) events whose alterations are sufficient to impair the activation of cyclin E-CDK2 complexes.