To ascertain the role of cyclin-dependent kinase 4 (Cdk4) in vivo, we have targeted the mouse Cdk4 locus by homologous recombination to generate two strains of mice, one that lacks Cdk4 expression and one that expresses a Cdk4 molecule with an activating mutation. Embryonic fibroblasts proliferate normally in the absence of Cdk4 but have a delayed S phase on re-entry into the cell cycle. Moreover, mice devoid of Cdk4 are viable, but small in size and infertile. These mice also develop insulin-deficient diabetes due to a reduction in β-islet pancreatic cells. In contrast, mice expressing a mutant Cdk4 that cannot bind the cell-cycle inhibitor P16 INK4a display pancreatic hyperplasia due to abnormal proliferation of β-islet cells. These results establish Cdk4 as an essential regulator of specific cell types.