Progression through the mammalian cell cycle is regulated by cyclins, cyclin- dependent kinases (CDKs), and cyclin-dependent kinase inhibitors (CKIs). The function of these proteins in the irreversible growth arrest associated with terminally differentiated cells is largely unknown. The function of Cip/Kip proteins p21(Cip1) and p27(Kip1) during erythropoietin-induced terminal differentiation of primary erythroblasts isolated from the spleens of mice infected with the anemia-inducing strain of Friend virus was investigated. Both p21(Cip1) and p27(Kip1) proteins were induced during erythroid differentiation, but only p27(Kip1) associated with the principal G(1) CDKs-cdk4, cdk6, and cdk2. The kinetics of binding of p27(Kip1) to CDK complexes was distinct in that p27(Kip1) associated primarily with cdk4 (and, to a lesser extent, cdk6) early in differentiation, followed by subsequent association with cdk2. Binding of p27(Kip1) to cdk4 had no apparent inhibitory effect on cdk4 kinase activity, whereas inhibition of cdk2 kinase activity was associated with p27(Kip1) binding, accumulation of hypo-phosphorylated retinoblastoma protein, and G(1) growth arrest. Inhibition of cdk4 kinase activity late in differentiation resulted from events other than p27(Kip1) binding or loss of cyclin D from the complex. The data demonstrate that p27(Kip1) differentially regulates the activity of cdk4 and cdk2 during terminal erythroid differentiation and suggests a switching mechanism whereby cdk4 functions to sequester p27(Kip1) until a specified time in differentiation when cdk2 kinase activity is targeted by p27(Kip1) to elicit G(1) growth arrest. Further, the data imply that p21(Cip1) may have a function independent of growth arrest during erythroid differentiation. (Blood. 2000;96:2746-2754)