This study examined the effect of subcellular localization of P21 on the proliferation and apoptosis of HepG2 cells. The coding genes of the wild and the mutant P21 were amplified by mega primer PCR from the plasmid pCEP-WAF1 which contains human P21 cDNA in the nuclear localizational signal (NLS) sequence, and then inserted into the eukaryotic expression vector pDsRed1-C1. The recombinants were transfected into HepG2 cells. The transcription and expression of P21 were determined by RT-PCR and fluorescence microscopy. The cell proliferation was measured by MTT, and the cell cycle and apoptosis of HepG2 cells by flow cytometry. The results of restriction analysis, DNA sequencing and fluorescence microscopy confirmed the construction of the wild and the mutant P21 in the eukaryotic expression plasmid. The plasmid containing the mutant P21 was found to accelerate cell proliferation and the wild P21 plasmid to inhibit cell proliferation. Cell cycle analysis showed that the cell ratio of G(0)/G(1) in the wild type group was significantly increased as compared with that in the mutant type group, and cell apoptosis analysis revealed that the apoptosis rate in the wild type group was much higher than that in the mutant type group. It was concluded that the subcellular localization of P21 may contribute to the development of hepatic cancer.