Epidermal growth factor (EGF) usually stimulates the proliferation of a variety of normal and malignant cells. In contrast, MDA468, a human breast cancer cell line with a very high number of EGF receptors, is growth inhibited in response to concentrations of EGF that stimulate most other cells. The purpose of this study was to elucidate the cellular mechanisms involved in EGF-induced growth inhibition. EGF treatment stimulated the sustained expression of the cyclin-dependent kinase (CDK) inhibitor p21(WAF1). The p21(WAF1) induction in EGF-treated MDA468 cells is probably p53-independent since these cells contain no active p53. The promoter for p21(WAF1) gene contains binding sites for signal transducer and activator of transcription (STAT) and EGF is known to activate members of this family of transcription factors. Using electrophoretic mobility shift assays (EMSA), we found that EGF activates STAT1 and STAT3 in the MDA468 cells. These activated STATs specifically recognised the three conserved STAT- responsive elements in the p21(WAF1) gene promoter, suggesting that STATs may be responsible for the p21(WAF1) induction by EGF in MDA468 cells. The sustained rise in p21(WAF1) in response to EGF is proposed to be a means of growth inhibition in these cells.