Max is a common dimerization partner for a family of transcription factors (Myc (20,27,29,38). Consistent with a role in regulating proliferation and growth, Myc-Max heterocomplexes drive cell growth and division and Myc expression is down-regulated during cellular differentiation. By contrast, Mad-Max complexes inhibit proliferation and are upregulated during cellular differentiation (1, 2, 9, 23, 37). Therefore, via the relative activities of the Myc-Max and Mad-Max heterodimers, the Max transcription factor network is thought to regulate growth and differentiation.Considerable evidence supports the positive effects of the Myc family and the negative effects of the Mad family on cell growth and proliferation. Overexpression of Myc proteins can transform primary rat embryo fibroblasts in cooperation with a number of oncogenes, most notably activated Ras (27). Expression of Mad family genes or Mnt blocks transformation by Myc plus activated Ras (14,16,29,30,34,52). The opposing functions of the Myc and Mad families are also observed in mice null for members of the myc or mad family and in transgenic mice overexpressing c-Myc or Mad1. Mouse embryos null for c-myc arrest development at day 9.5 postcoitum (18), and N-Myc null mice fail to fully develop the heart, lungs, and nervous system (15,40). By contrast, mad1 null animals have defects in the differentiation capacity of granulocyte clusterforming cells (24), and mxi1 null mice show increased proliferation in precursor cell populations of the prostatic epithelium (48). The phenotypes generated by overexpression of myc and mad family genes are reciprocal to those seen in the genetic null animals; c-myc overexpression in murine B cells results in cells that are larger than normal (31), and transgenic mice overexpressing mad1 are smaller than normal (45). Therefore, these phenotypes are entirely consistent with the proposed positive effects of the myc family and the negative effects of the mad family in regulating cell growth and differentiation. These opposing effects of the Myc and Mad families are likely also active in Drosophila melanogaster because flies homozygous for hypomorphic alleles of dmyc are smaller than normal (25) and overexpression of dmyc in wing imaginal discs yields cells that are larger than normal (32).Myc-Max and Mad-Max heterocomplexes both recognize the CACGTG subclass of E-box elements; however, Myc-Max heterocomplexes activate transcription while Mad-Max complexes repress transcription (5, 9, 47). The opposing effects of Myc and Mad may manifest themselves by reciprocally regulating the expression of genes involved in cell growth and proliferation. Consistent with this hypothesis, Myc transcriptional targets include genes involved in metabolism (CAD, ornithine decarboxylase, lactate dehydrogenase A, and dihydrofolate reductase genes) and cell cycle progression (cyclin A, cyclin D2, cyclin E, and telomerase genes) (13,17,26,44). Furthermore, Mxi1 can downregulate ornithine decarboxylase expression (55), and cyclin D2-associated kinase act...