Expression of oncogenic Ras in epithelial tumor cells is linked to the loss of transforming growth factor-beta (TGF-beta) anti-proliferative activity, and was proposed to involve inhibition of Smad2/3 nuclear translocation. Here we studied several epithelial cell lines expressing oncogenic N-RasK61 and show that TGF-beta-induced nuclear translocation of and transcriptional activation by Smad2/3 were unaffected. In contrast, oncogenic Ras mediated nuclearto-cytoplasmic mislocalization of p27KiP1 (p27) and of the cyclin-dependent kinase (CDK) CDK6, but not CDK2. Concomitantly, oncogenic Ras abrogated the ability of TGF-beta to release p27 from CDK6, to enhance its binding to CDK2 and to inhibit CDK2 activity. Inactivation of Ras by a specific antagonist restored the growth inhibitory response to TGF-beta with concurrent normalization of p27 and CDK6 localization. Therefore, the disruption of TGF-beta-mediated growth inhibition by oncogenic Ras appears to be due to lack of inhibition of CDK2, caused by the sequestration of p27 and CDK2 in different subcellular compartments and by the loss of TGF-beta-induced partner switching of p27 from CDK6 to CDK2.