The helix-loop-helix transcription factor E2A plays important roles not only in promoting cellular differentiation but also in suppressing cell growth. Id proteins, the inhibitors of E2A, have opposite effects on cell differentiation and growth. To understand the mechanisms by which E2A suppresses cell growth, we examined the role of E2A in regulating the expression of the cyclin-dependent kinase inhibitor p21 CIP1/WAF1/SDI1 , which prevents cell cycle progression upon overexpression. By using transient-cotransfection assays of luciferase reporter constructs in HeLa cells, we have found that overexpression of E2A can transcriptionally activate the p21 gene. To identify the sequences that mediate this activation in the promoter of the p21 gene, we carried out mutational analyses. Out of the eight putative E2A-binding sequences (E1 to E8) in the promoter, the E1 to E3 sequences located close to the transcription start site are found to be essential. In addition, loss of the E boxes in the promoter also reduces p21 expression without cotransfection with E2A in HIT pancreatic cells, where the endogenous E2A-like activity is high. Furthermore, we have also shown that overexpression of E2A in 293T cells activates expression of the endogenous p21 gene at both the levels of mRNA and protein. In correlation with the finding that E47 overexpression leads to growth arrest in NIH 3T3 cells, we have shown that Id1 overexpression in NIH 3T3 cells accelerates cell growth and inhibits p21 expression. Taken together, these results provide insight into the mechanisms by which E2A and Id proteins control cell growth.