mac25, a retinoic acid-inducible gene that is expressed at high levels in senescent epithelial cells, was initially cloned as a gene that is differentially expressed in meningioma. Although the homology of its product with members of family of insulin-like growth factor-binding proteins was suggested, the product also exhibits strong homology to follistatin, an activin-binding protein. However, a domain corresponding to the carboxyl terminus of follistatin is not found in mac25. The carboxyl-terminally truncated form of follistatin, generated by alternative splicing, has stronger activin-binding activity than the complete form. This result suggests that mac25 might act as an activated follistatin. Clonal growth of a p53-deficient osteosarcoma cell line was strongly inhibited when the murine mac25 gene, as well as the p53 gene, was introduced. Resembling activins that belong to the transforming growth factor-beta (TGF-beta) superfamily, mac25 and p53 might associate with similar but distinct targets, namely cyclin-dependent kinase inhibitors. However, there is no evidence for compensation of p53 function by mac25 in the development of p53-deficient mice, as judged from the pattern of expression of mac25 in mice. mac25 might act as a tumor suppressor, modulating signaling of the TGF-beta family, as does alpha-inhibin.