Polyethylene glycol (PEG) is a safe and effective chemopreventive agent against colorectal carcinogenesis in cell culture, animal models and human subjects. Although the precise molecular mechanism is unclear, we previously reported that PEG suppresses colonic epithelial proliferation. As cellular proliferation is driven by complex G1-S phase transition, we now characterize the role of PEG on cell cycle regulation. We focused our attention on the effect of PEG on the CDK inhibitor p21cip1/waf1, which is implicated in early colon carcinogenesis and is upregulated by non-steroidal anti-inflammatory drugs. These studies were done in the azoxymethane-treated (AOM) rat model as well as in HT-29 colon cancer cells. Immunohistochemical analysis revealed that while AOM decreased the p21 expression (75%, p<0.01) in the premalignant colonic mucosa, PEG induced p21 levels back to normal. These findings paralleled a decreased BrdUrd incorporation (78%, p<0.001) and hypophosphorylated retinoblastoma protein (Rb; by 47%) signifying PEG's antiproliferative activity. Furthermore, in HT-29 cells, PEG decreased proliferation as measured by PCNA (68% reduction), increased p21 expression (2.3-fold), induced cell cycle arrest during G0/G1 phase (45% reduction in S phase cells) and inhibited the phosphorylation of Rb (by 52% compared to untreated). PEG caused greater than a 2-fold induction of protein and mRNA level of p21cip1/waf1 in HT-29 cells. These results demonstrate for the first time that PEG is involved in p21 regulation concomitant with G1S phase cell cycle arrest and it is through these effects that it can exert its anti-proliferative and hence chemopreventive role.