Reintroduction of RB into SAOS2 (RB-/-) cells causes a G1 arrest and characteristic cellular swelling. Coexpression of the cellular transcription factor E2F-1 could overcome these effects. The ability of E2F-1 to bind to RB was neither necessary nor sufficient for this effect, and S-phase entry was not accompanied by RB hyperphosphorylation under these conditions. Furthermore, E2F-1 could overcome the actions of a nonphosphorylatable but otherwise intact RB mutant. These data, together with the fact that RB binds to E2F-1 in vivo, suggest that E2F-1 is a downstream target of RB action. Mutational analysis showed that the ability of E2F-1 to bind to DNA was necessary and sufficient to block the formation of large cells by RB, whereas the ability to induce S-phase entry required a functional transactivation domain as well. Thus, the induction of a G1 arrest and the formation of large cells by RB in these cells can be genetically dissociated. Furthermore, the ability of the E2F-1 DNA-binding domain alone to block one manifestation of RB action is consistent with the notion that RB-E2F complexes actively repress transcription upon binding to certain E2F-responsive promoters. In keeping with this view, we show here that coproduction of an E2F1 mutant capable of binding to DNA, yet unable to transactivate, is sufficient to block RB-mediated transcriptional repression.