The Cdk inhibitor p21(WAF1/CIP1) is a negative regulator of the cell cycle, although its expression is induced by a number of mitogens that promote cell proliferation. We have found that E2F1 and E2F3, transcription factors that activate genes required for cell cycle progression, are strong activators of the p21 promoter. In contrast, HBP1 (HMG-box protein-1), a novel retinoblastoma protein-binding protein, can repress the p21 promoter and inhibit induction of p21 expression by E2F. Both E2Fs and HBP1 regulate p21 transcription through cis-acting elements located between nucleotides -119 to +16 of the p21 promoter and the DNA binding domains of each of these proteins are required for activity. Sequences between -119 and -60 basepairs containing four Sp1 consensus elements and two noncanonical E2F binding sites are of major importance for E2F activation, although E2F1 and E2F3 differ in the extent of their ability to activate expression when this segment is deleted. The opposing effects of E2Fs and HBP1 on p21 promoter activity suggest that interplay between these factors may determine the level of p21 transcription in vivo.