Because beta-catenin target genes such as cyclin D1 are involved in cell cycle progression, we examined whether beta-catenin has a more pervasive role in normal cell proliferation, even upon stimulation by non-Wnt ligands. Here, we demonstrate that epidermal growth factor (EGF) stimulates T-cell factor/lymphoid enhancer factor (Tcf/Lef) transcriptional activity in nontransformed mammary epithelial cells (MCF-10A) and that its transcriptional activity is essential for EGF-mediated progression through G(1)/S phase. Thus, expression of dominant-negative Tcf4 blocks EGF-mediated Tcf/Lef transcriptional activity and bromodeoxyuridine uptake. In fact, the importance of EGF-mediated Tcf/Lef transcriptional activity for cell cycle progression may lie further upstream at the G(1)/S phase transition. We demonstrate that dominant-negative Tcf4 inhibits a reporter of cyclin D1 promoter activity in a dose-dependent manner. Importantly, dominant-negative Tcf4 suppresses EGF- mediated cell cycle activity specifically by thwarting EGF- mediated Tcf/Lef transcriptional activity, not by broader effects on EGF signaling. Thus, although expression of dominant-negative Tcf4 blocks EGF- mediated TOPFLASH activation, it has no effect on either EGF receptor or ERK phosphorylation, further underscoring the fact that Tcf/ Lef-mediated transcription is essential for cell cycle progression, even when other pro-mitogenic signals are at normal levels. Yet, despite its essential role, Tcf/Lef transcriptional activity alone is not sufficient for cell cycle progression. Serum also stimulates Tcf/ Lef transcriptional activation in MCF-10A cells but is unable to promote DNA synthesis. Taken together, our data support a model wherein EGF promotes Tcf/ Lef transcriptional activity, and this signal is essential but not sufficient for cell cycle activity.