Much of the predisposition to hereditary breast and ovarian cancer has been attributed to inherited defects in the BRCA1 tumour-suppressor gene(1-3). The nuclear protein BRCA1 has the properties of a transcription factor(4-7), and can interact with the recombination and repair protein pAD51 (ref. 8), Young women with germline alterations in BRCA1 develop breast cancer at rates 100-fold higher than the general population(3), and BRCA1-null mice die before day 8 of development(9,10). However, the mechanisms of BRCA1-mediated growth regulation and tumour suppression remain unknown, Here we show that BRCA1 transactivates expression of the cyclin-dependent kinase inhibitor p21(WAF1/CIP1) in a p53-independent manner, and that BRCA1 inhibits cell-cycle progression into the S-phase following its transfection into human cancer cells, BRCA1 does not inhibit S-phase progression in p21(-/-) cells, unlike p21(+/+) cells, and tumour-associated, transactivation-deficient mutants of BRCA1 are defective in both transactivation of p21 and cell-cycle inhibition, These data suggest that one mechanism by which BRCA1 contributes to cell-cycle arrest and growth suppression is through the induction of p21.