The transforming growth factor beta (TGF-beta) signaling pathway, which is activated by the TGF-beta receptor complex consisting of type I and type II TGF-beta receptors (TGFBR1 and TGFBR2), regulates cell growth and death. TGF-beta and components of its signaling pathway, particularly TGFBR2, have been implicated as tumor suppressor genes and important antimitogenic factors in the gastrointestinal tract and liver. An in vivo approach to study these effects has been hindered by the embryonic lethality of Tgfbr2(-/-) mice and poor viability of the Tgfb1(-/-) mice. Consequently, we have developed a hepatocyte-specific Tgfbr2 knockout mouse, the Alb-cre Tgfbr2(flx/flx) mouse, to study the physiologically relevant effects of TGF-beta signaling on epithelial cell proliferation in vivo. After 70% hepatectomy, we observed increased proliferation and an increased liver mass : body weight ratio in the Alb-cre Tgfbr2(flx/flx) mice compared to Tgfbr2(flx/flx) mice. We also observed decreased expression and increased phosphorylation of p130 in the livers from the Alb-cre Tgfbr2(flx/flx) mice as well as increased expression of cyclin E, which is transcriptionally regulated, in part, by p130:E2F4. Consistent with these results, in a hepatocyte cell line derived from the Tgfbr2(flx/flx) mice, we found that TGF-beta increases the nuclear localization of E2F4, and presumably the transcriptional repression of the p130:E2F4 complex. Thus, we have demonstrated that TGF-beta signaling in vivo regulates the mitogenic response in the regenerating liver, affecting the liver mass : body weight ratio after partial hepatectomy, and that these mitogenic responses are accompanied by alterations in p130 expression and phosphorylation, implicating p130 as one of the proteins regulated in vivo by TGF-beta during liver regeneration.