p27(Kip1) is an important effector of G(1) arrest by transforming growth factor beta (TGF-beta). Investigations in a human mammary epithelial cell (HMEC) model, including cells that are sensitive (184(S)) and resistant (184A1L5(R)) to G(1) arrest by TGF-beta, revealed aberrant p27 regulation in the resistant cells. Cyclin E1-cyclin-dependent kinase 2 (cdk2) and cyclin A-cdk2 activities were increased, and p27-associated kinase activity was detected in 184A1L5(R) cells. p27 from 184A1L5(R) cells was localized to both nucleus and cytoplasm, showed an altered profile of phosphoisoforms, and had a reduced ability to bind and inhibit cyclin E1-cdk2 in vitro when compared to p27 from the sensitive 184(S) cells. In proliferating 184A1L5(R) cells, more p27 was associated with cyclin D1-cdk4 complexes than in 184(S). While TGF-beta inhibited the formation of cyclin D1-cdk4-p27 complexes in 184(S) cells, it did not inhibit the assembly of cyclin D1-cdk4-p27 complexes in the resistant 184A1L5(R) cells. p27 phosphorylation changed during cell cycle progression, with cyclin E1-bound p27 in G(0) showing a different phosphorylation pattern from that of cyclin D1-bound p27 in mid-G(1). These data suggest a model in which TGF-beta modulates p27 phosphorylation from its cyclin D1-bound assembly phosphoform to an alternate form that binds tightly to inhibit cyclin E1-cdk2. Altered phosphorylation of p27 in the resistant 184A1L5(R) cells may favor the binding of p27 to cyclin D1-cdk4 and prevent its accumulation in cyclin E1-cdk2 in response to TGF-beta.