Cyclins and their associated catalytic subunits, cyclin-dependent kinases (CDKs), are the major regulators for the advance of cells through their growth cycle. Those cyclins that function in the G1 phase of the cell cycle play an especially important role in cellular growth regulation, as the major decision governing proliferation, quiescence and differentiation is made during this period. In addition to their roles as cell cycle regulators in the G1 phase, the three D-type cyclins (cyclin D1, D2, and D3) are intimately involved in differentiation, transcriptional activation, and signal transaction pathway. For examples, D2 and D3, but not D1, regulate G-CSF-induced myeloid differentiation; D1 physically interacts with the estrogen receptor and activates transcription in the absence of the ligand; and D2 might be a down stream mediator for the FSH-dependent signaling pathway. The structural basis that determines the differential activities of D-type cyclins is not clear. To study the roles of cyclin D2 in differentiation, transcription, and signaling, several cyclin D2 overexpressing cell lines were developed using retrovirus-mediated gene transfer. The characterization of these cell lines revealed that overexpression of cyclin D2 shortens the G1 but prolongs the S phase, alters the expression of several genes in the G1 phase of the cell cycle, and inhibits hemin-induced differentiation of K562 cells toward the erythroid lineage. Most interestingly, cells overexpressing cyclin D2 exhibited enhanced transcription capacity for different viral or cellular promoters. The increase in transcription capacity could be reproduced by transient transfection of four different types of cells with an expression vector containing the cyclin D2 cDNA. The effect was cyclin D2-specific, as other cyclins, CDKs and several transcriptional activators had no or significantly less effect. In an attempt to localize critical motifs of cyclin D2 for transcriptional activation, several cyclin D2 mutants were constructed. It was found that the mutations at RB- or CDK-binding site did not adversely affect cyclin D2's ability to enhance reporter transcription and that the critical sequence for transcriptional activation lied in the C-terminal region of cyclin D2. In addition, cyclin D2 overexpression also resulted in the activation of a novel nuclear kinase. These findings provide a potential mechanism linking cell cycle progression to transcriptional activation and signal transaction.