The proto-oncogene MYC plays a critical role in cell proliferation and tumorigenesis, and its down-regulation by transforming growth factor beta (TGFbeta) signaling is necessary for TGFbeta to inhibit cell proliferation. KLF5, on the other hand, is a pro-proliferative basic transcription factor that reverses function to become an anti-proliferative TGFbeta cofactor upon TGFbeta stimulation in epithelial homeostasis. In this study we investigated whether KLF5 directly regulates MYC transcription in epithelial cells in the context of TGFbeta. Knockdown of KLF5 significantly reduced MYC expression in the HaCaT epidermal epithelial cells. When TGFbeta was applied, however, whereas MYC expression was significantly inhibited, knockdown of KLF5 increased MYC expression. Furthermore, re-expression of KLF5 restored the inhibitory effect of TGFbeta on MYC expression in two cancer cell lines. Chromatin immunoprecipitation and oligo pulldown experiments demonstrated that whereas binding of KLF5 to both KLF5 binding element (KBE) and TGFbeta inhibitory element (TIE) DNA elements was necessary for MYC transcription, binding to KBE was decreased by TGFbeta, and binding to TIE was increased by TGFbeta. These results suggest that KLF5 is not only essential for MYC transcription in proliferating epithelial cells but also mediates the inhibitory effect of TGFbeta on MYC transcription. Furthermore, different binding sites mediate different effects of KLF5 in the context of TGFbeta.