The polymerase associated factor 1 (PAF1) complex (PAF1c) promotes RNA polymerase II (RNA Pol II) transcription at the elongation step; however, how PAF1c transcription activity is selectively regulated during cell fate transitions remains poorly understood. Here, we reveal that the alternative reading frame (ARF) tumor suppressor operates at two levels to restrain PAF1c-dependent oncogenic transcriptional programs upon p53 loss in mouse cells. First, ARF assembles into homo-oligomers to bind the PAF1 subunit to promote PAF1c disassembly, consequently dampening PAF1c interaction with RNA Pol II and PAF1c-dependent transcription. Second, ARF targets the RUNX family transcription factor 1 (RUNX1) to selectively tune gene transcription. Consistently, ARF loss triggers RUNX1- and PAF1c-dependent transcriptional activation of pro-growth ligands (growth differentiation factor/bone morphogenetic protein [GDF/BMP]), promoting a cell-intrinsic GDF/BMP-Smad1/5 axis that aberrantly induce cell growth. Notably, pharmacologic inactivation of GDF/BMP signaling and genetic perturbation of RUNX1 significantly attenuate cell proliferation mediated by dual p53 and ARF loss, offering therapeutic utility. Our data underscore the significance of selective ARF-mediated tumor-suppressive functions through a universal transcriptional regulator.