Mammalian target of rapamycin (mTOR) is a key regulator of cell growth acting via two independent targets, ribosomal protein S6 kinase 1 (S6K1) and 4EBP1. While each is known to regulate translational efficiency, the mechanism by which they control cell growth remains unclear. In addition to increased initiation of translation, the accelerated synthesis and accumulation of ribosomes are fundamental for efficient cell growth and proliferation. Using the mTOR inhibitor rapamycin, we show that mTOR is required for the rapid and sustained serum-induced activation of 45S ribosomal gene transcription (rDNA transcription), a major rate-limiting step in ribosome biogenesis and cellular growth. Expression of a constitutively active, rapamycin-insensitive mutant of S6K1 stimulated rDNA transcription in the absence of serum and rescued rapamycin repression of rDNA transcription. Moreover, overexpression of a dominant-negative S6K1 mutant repressed transcription in exponentially growing NIH 3T3 cells. Rapamycin treatment led to a rapid dephosphorylation of the carboxy-terminal activation domain of the rDNA transcription factor, UBF, which significantly reduced its ability to associate with the basal rDNA transcription factor SL-1. Rapamycin-mediated repression of rDNA transcription was rescued by purified recombinant phosphorylated UBF and endogenous UBF from exponentially growing NIH 3T3 cells but not by hypophosphorylated UBF from cells treated with rapamycin or dephosphorylated recombinant UBF. Thus, mTOR plays a critical role in the regulation of ribosome biogenesis via a mechanism that requires S6K1 activation and phosphorylation of UBF.