Cell division drives T cell clonal expansion and differentiation, and is the result of concerted signaling from Ag, costimulatory, and growth factor receptors. How these mitogenic signals are coupled to the cell cycle machinery in primary T cells is not clear. We have focused on the role of p27 kip1, a major cyclin-dependent kinase binding protein expressed by CD4+ T cells. Our studies using p27 kip1 gene dosage demonstrate that early after activation, p27 kip1 acts to promote, rather than inhibit, G 1 to S phase progression within the first division cycle. However, throughout subsequent cell divisions p27 kip1 behaves as a negative regulator, directly establishing the threshold amount of growth factor signaling required to support continued cell division. During this phase, signals from CD28 and IL-2R cooperate with the TCR to “tune” this threshold by inducing the degradation of p27 kip1 protein, and we show that agents that block these pathways require elevated p27 kip1 levels for their full antiproliferative activity. Finally, we show that p27 kip1 opposes the development of CD4+ T cell effector function, and is required for the full development of anergy in response to a tolerizing stimulus. Our results suggest that p27 kip1 plays a complex and important role in the regulation of cell division and effector function in primary CD4+ T cells.