E2F is a family of transcription factors that regulate both cellular proliferation and differentiation. To establish the role of E2F3 in vivo, we generated an E2f3 mutant mouse strain. E2F3-deficient mice arise at one-quarter of the expected frequency, demonstrating that E2F3 is important for normal development. To determine the molecular consequences of E2F3 deficiency, we analyzed the properties of embryonic fibroblasts derived from E2f3 mutant mice. Mutation of E2f3 dramatically impairs the mitogen-induced, transcriptional activation of numerous E2F-responsive genes. We have been able to identify a number of genes, including B-myb, cyclin A, cdc2, cdc6, and DHFR, whose expression is dependent on the presence of E2F3 but not E2F1. We further show that a critical threshold level of one or more of the E2F3-regulated genes determines the timing of the G(1)/S transition, the rate of DNA synthesis, and thereby the rate of cellular proliferation. Finally, we show that E2F3 is not required for cellular immortalization but is rate limiting for the proliferation of the resulting tumor cell lines. We conclude that E2F3 is critical for the transcriptional activation of genes that control the rate of proliferation of both primary and tumor cells.