The majority of signal transduction studies have focused on events induced by mitogen stimulation. However, little is known about the negative control signals that cause or maintain growth arrest and must be overcome for mitogenesis to occur. We investigated the possible role of protein phosphatases in this negative regulatory process. Treatment of quiescent hamster and human fibroblasts with low doses of the phosphatase inhibitors sodium o-vanadate or okadaic acid allowed 30–40% of cells to progress from G0-G1 arrest to S phase. This was accompanied by phosphorylation of the retinoblastoma and MAP-kinase proteins, as well as induction of the cdc2 protein. Furthermore, we observed that protein phosphatase inhibitor treatment could override the block to DNA synthesis in senescent cells, which are normally nonresponsive to mitogens. These data suggest that protein phosphatases may play a role in the negative regulation of cell growth and maintenance of growth arrest.