The role of the IFN-inducible p204 as growth regulator was investigated by transfecting an expression vector constitutively expressing p204 into several cell lines. Like pRB and p107, p204 is a potent growth inhibitor in sensitive cells, as demonstrated by the cell focus assay. Since stable transfectants of sensitive lines constitutively overexpressing p204 could not be established in vitro, we inserted the 204 cDNA into a vector bearing an heavy-metal-inducible promoter. Here we show that proliferation of B6MEF fibroblasts lacking endogenous p204 is strongly inhibited by transient p204 expression in the nucleus. p204 delays G1 progression into the S-phase and cells accumulate with a DNA content equivalent to cells arrested in late G1. Moreover, the role of p204 in the control of cell growth in vivo was investigated by generating transgenic mice in which the Ifi 204 gene was constitutively expressed in all tissues. To this end, expression vectors bearing the 204 cDNA under the control of the SV40 viral promoter were constructed. The overexpression of the p204 transgene achieved by injecting fertilized mouse eggs with these vectors was compatible with embryo development up to the four-cell stage in an in vitro follow-up of 4.5 days. However, no viable animals with an intact copy of the transgene were obtained, suggesting that high and constitutive levels of p204 expression can impair normal embryo development. These findings indicate that p204 plays a negative role in growth regulation and provide new information about the molecular mechanisms exploited by IFNs to inhibit cell proliferation.