The Forkhead transcription factors AFX, FKHR and FKHR-L1 are orthologues of DAF-16, a Forkhead factor that regulates longevity in Caenorhabditis elegans(1-3). Here we show that overexpression of these Forkhead transcription factors causes growth suppression in a variety of cell lines, including a Ras-transformed cell line and a cell line lacking the tumour suppressor PTEN. Expression of AFX blocks cell-cycle progression at phase G(1), independent of functional retinoblastoma protein (pRb) but dependent on the cell-cycle inhibitor p27(kip1). Indeed, AFX transcriptionally activates p27(kip1), resulting in increased protein levels. We conclude that AFX-like proteins are involved in cell-cycle regulation and that inactivation of these proteins is an important step in oncogenic transformation.