During cortical neurogenesis, cell proliferation and cell cycle exit are carefully regulated to ensure that the appropriate numbers of cells are produced. The antiproliferative agent transforming growth factor β1 (TGFβ1) and its receptors are endogenously expressed in proliferative zones of the developing cerebral cortex, thus implicating the growth factor in cell cycle regulation. The present study tested the hypothesis that TGFβ1 promotes cell cycle exit in the cortical ventricular zone (VZ) through modulation of cell cycle protein expression, in particular cyclin D1 and the cyclin-dependent kinase inhibitors p27 and p21. Although it did not affect the length of the cell cycle, TGFβ1 decreased the fraction of VZ-cycling cells by 21% and increased the number of VZ cells exiting the cell cycle a commensurate 24%. TGFβ1 selectively increased the expression of p21 in the VZ. In addition, high p21 expression levels were observed in VZ cells as they exited the cell cycle, and TGFβ1 increased the number p21-positive cells exiting the cell cycle. Collectively, these data show the following: (1) TGFβ1 promotes cell cycle exit, (2) p21 upregulation is correlated with cell cycle exit, and (3) TGFβ1-induced cell cycle exit is mediated by p21.