We report that TGF alpha induces activation of the p90 ribosomal S kinase (RSK), which results in the phosphorylation of rat C/EBP beta on Ser-105 and of mouse C/EBP beta on Thr-217 and concomitantly stimulates proliferation in differentiated hepatocytes. Moreover, C/EBP beta-/- mouse hepatocytes respond to TGF alpha when wild-type C/EBP beta is reexpressed, whereas they remain refractory to the growth effect of TGF alpha when expressing phosphoacceptor mutants rat C/EBP beta Ala-105 or mouse C/EBP beta Ala-217. In contrast, C/EBP beta-/- hepatocytes expressing the phosphorylation mimic mutants, rat C/EBP beta Asp-105 or mouse C/EBP beta Glu-217, exhibited marked proliferation in the absence of TGF alpha. Thus, a site-specific phosphorylation of the transcription factor C/EBP beta is critical for hepatocyte proliferation induced by TGF alpha and other stimuli that activate RSK.