The Ski and Sno oncoproteins are components of a macromolecular complex containing the co-repressor N-CoR/SMRT, mSin3 and histone deacetylase. This complex has been implicated in the transcriptional repression exerted by a number of repressors including nuclear hormone receptors and Mad. Further more, Ski and Sno negatively regulate transforming growth factor-beta (TGF-beta) signaling by recruiting this complex to Smads. Here we show that loss of one copy of sno increases susceptibility to tumorigenesis in mice. Mice lacking sno died at an early stage of embryogenesis, and sno was required for blastocyst formation. Heterozygous (sno(+/-)) mice developed spontaneous lymphomas at a low frequency and showed an increased level of tumor formation relative to wild-type mice when challenged with a chemical carcinogen. sno(+/-) embryonic fibroblasts had an increased proliferative capacity and the introduction of activated Ki-ras into these cells resulted in neoplastic transformation. The B cells, T cells and embryonic fibroblasts of sno(+/-) mice had a decreased sensitivity to apoptosis or cell cycle arrest. These findings demonstrate that sno acts as a tumor suppressor at least in some types of cells.