The retinoblastoma susceptibility gene product (pRb) plays an important role in constraining cellular proliferation and in regulating the cell cycle. The pRb inhibits transcription of genes involved in growth control (reviewed in ref. 3) and can regulate transforming growth factor beta 1 (TGF-beta 1) gene expression. TGF-beta isoforms also down-regulate cellular proliferation. To determine whether pRb also regulates expression of other TGF-beta isoforms, we examined the effect of pRb on the expression of the human TGF-beta 2 gene. The human TGF-beta 2 promoter contains multiple elements including an ATF site, which is essential for basal promoter activity. Here we report that pRb activates transcription of the human TGF-beta 2 gene. The promoter element responsible for pRb-mediated transcriptional regulation is a binding site for ATF proteins, an extensive transcription factor family. We provide evidence that implicates ATF-2 in pRb-responsiveness. First, the ATF promoter element in the TGF-beta 2 gene is a high-affinity ATF-2-binding site. Second, a GAL4-ATF2 fusion protein can support pRb-mediated transcriptional activation of a promoter containing GAL4-binding sites. Third, ATF-2 in nuclear extracts can interact with pRb. Our results reveal a new mechanism by which pRb constrains cellular proliferation: by activating expression of the inhibitory growth factor, TGF-beta 2.