Escape from TGF-beta inhibition of proliferation is a hallmark of multiple cancers including lung cancer. We explored the role of ELF, crucial TGF-beta adaptor protein identified from endodermal progenitor cells, in lung carcinogenesis and cell-cycle regulation. Interestingly, elf-/- mice develop multiple defects that include lung, liver, and cardiac abnormalities. Four out of 6 lung cancer and mesothelioma cell lines displayed deficiency of ELF expression with increased CDK4 expression. Immunohistochemistry and Western blot analysis of primary human lung cancers also showed decreased ELF expression and overexpression of CDK4. Moreover, rescue of ELF in ELF-deficient cell lines decreased the expression of CDK4 and resulted in accumulation of G1/S checkpoint arrested cells. These results suggest that disruption in TGF-beta signaling mediated by loss of ELF in lung cancer leads to cell-cycle deregulation by modulating CDK4 and ELF highlights a key role of TGF-beta adaptor protein in suppressing early lung cancer.