The increased proliferation rate of hepatocytes is one of the major risk factors for the development of hepatocellular carcinoma. In this study, we investigated the mechanism by which hepatitis C virus (HCV) core protein represses transcription of the universal cyclin-dependent kinase inhibitor p21 gene in murine fibroblast NIH 3T3 cells. From the transient reporter assays of p21 promoter, we found that the TGF-beta-responsive element (TbetaRE) located between -83 and -74 of the p21 promoter is responsible for the effect. The TGF-beta-induced p21 promoter activity was specifically decreased by HCV core protein and in the presence of the inhibitory Smad7 the repression effect was almost completely abolished. Furthermore, HCV core protein stimulated the growth rate of NIH 3T3 cells and could overcome growth arrest by TGF-beta but not by butyrate, suggesting that HCV core protein stimulates cell cycle progression by repressing p21 transcription through a TGF-beta pathway.