Epidermal keratinocyte cultures were established from newborn mice expressing a null mutation in the p53 gene to explore the contribution of p53 to epidermal growth regulation and neoplasia. Keratinocytes were initiated by transduction with a replication-defective retrovirus encoding the v-rasHa oncogene and grafted onto nude mouse hosts. Tumors arising from keratinocytes heterozygous or null for functional p53 in the presence of v-rasHa have growth rates approximately 5-fold higher than those derived from p53(+/+) controls and rapidly form carcinomas, in contrast to the benign phenotype observed in p53(+/+)/v-rasHa grafts. In vitro, p53-deficient keratinocytes with and without v-rasHa expression display decreased responsiveness to the negative growth regulators transforming growth factors beta 1 and beta 2. In combination with v-rasHa, p53-deficient keratinocytes also exhibit decreased responsiveness to elevated Ca2+. These differences between genotypes cannot be attributed to changes in transforming growth factor beta receptor types present or altered levels of epidermal growth factor receptor and are independent of c-myc transcript levels. mRNA expression for the p-53 inducible protein WAF1 correlates with p53 gene dosage, but low levels are still detectable in p53(-/-) keratinocytes. The altered responsiveness of p53 deficient keratinocytes to negative growth regulators may provide a growth advantage to such cells in vivo and render them more susceptible to genetic alterations and malignant conversion.