Accumulating evidence suggests that angiotensin II type II (AT(2)) receptor subtype negatively regulates cell proliferation in pathophysiological conditions associated with tissue remodeling. However, the mechanisms through which AT(2) receptor achieves this effect remain poorly understood. In this study, we demonstrate that expression of AT(2) receptor inhibits the proliferation of rat fibroblasts in a ligand-independent manner. The antiproliferative action of AT(2) is dependent on the density of surface receptors. We show that AT(2) receptor expression negatively regulates G1 phase progression in both cycling cells and G0-arrested cells stimulated to re-enter the cell cycle, but has no detectable effect on apoptosis. The delay in cell-cycle progression of AT(2)-expressing cells is associated with downregulation of cyclin E expression, decreased assembly of cyclin E-Cdk2 complexes, and the resulting attenuation of Cdk2 activation. The induction of Cdk4 expression and activity is also markedly attenuated, which likely contributes to the inhibition of cyclin E expression. Ectopic expression of Cdk4 alleviates the proliferation defect of AT(2)-expressing cells. These findings suggest that the growth-inhibitory effects of the AT(2) receptor are attributable in part to its spontaneous inhibitory action on the cell cycle machinery.