AP-1 transcriptional activity is stimulated by the transformation promoters phorbol 12-myristate 13-acetate ('12-O-tetradecanoylphorbol 13- acetate,' TPA) and epidermal growth factor (EGF) in promotion-sensitive (P+) but not in promotion-resistant (P-) JB6 mouse epidermal cell lines. Although TPA stimulates expression of the jun and fos family genes, only c-jun expression shows higher elevation in P+ cells than in P- cells. The present study tests the hypothesis that induced AP-1 activity is required for tumor promoter-induced transformation in JB6 P+ cells. Both retinoic acid and the glucocorticoid fluocinolone acetonide inhibited basal and TPA-induced AP-1 activities that were tested with a stromelysin promoter-chloramphenicol acetyltransferase reporter gene in P+ cells. Since both retinoic acid and fluocinolone acetonide are active in inhibiting TPA-induced anchorage- independent transformation of P+ cells in the dose range that blocks TPA- induced AP-1 activity, their antipromoting effects may occur through inhibition of AP-1 activity. To test the hypothesis with a more specific inhibitor, stable clonal transfectants of P+ cells expressing dominant negative c-jun mutant encoding a transcriptionally inactive product were analyzed. All transfectants showed a block in TPA and EGF induction of AP-1 activity. All transfectants also showed inhibition of TPA-induced transformation, and most transfectants showed a block in EGF-induced transformation. These results indicate that AP-1 activity is required for TPA- or EGF-induced transformation. This work demonstrates that a specific block in induced AP-1 activity inhibits tumor promoter-induced transformation.