Medulloblastoma, the most common brain tumor in childhood, appears to originate from cerebellar granule cell precursors (GCPs), located in the external granular layer (EGL) of the cerebellum. The antiproliferative gene PC3 (Tis21/BTG2) promotes cerebellar neurogenesis by inducing GCPs to shift from proliferation to differentiation. To assess whether PC3 can prevent the neoplastic transformation of GCPs and medulloblastoma development, we crossed transgenic mice conditionally expressing PC3 (TgPC3) in GCPs with Patched1 heterozygous mice (Ptc(+/-)), a model of medulloblastoma pathogenesis characterized by hyperactivation of the Sonic Hedgehog pathway. Perinatal up-regulation of PC3 in Ptc(+/-)/TgPC3 mice results in a decrease of medulloblastoma incidence of approximately 40% and in a marked reduction of preneoplastic abnormalities, such as hyperplastic EGL areas and lesions. Moreover, overexpression of cyclin D1, hyperproliferation, and defective differentiation--observed in Ptc(+/-) GCPs--are restored to normality in Ptc(+/-)/TgPC3 mice. The PC3-mediated inhibition of cyclin D1 expression correlates with recruitment of PC3 to the cyclin D1 promoter, which is accompanied by histone deacetylation. Remarkably, down-regulation of PC3 is observed in preneoplastic lesions, as well as in human and murine medulloblastomas. As a whole, this indicates that PC3 may prevent medulloblastoma development by controlling cell cycle and promoting differentiation of GCPs.