The cyclin-dependent kinase (CDK) inhibitor p27 kip1 is an important negative regulator of the cell cycle that sets a threshold for mitogenic signals in T lymphocytes, and is required for T cell anergy in vitro. To determine whether p27 kip1 is required for tolerance in vivo, we performed cardiac allograft transplantation under conditions of combined CD28/CD40L costimulatory blockade. Although this treatment induced long-term allograft survival in wild-type recipients, costimulatory blockade was no longer sufficient to induce tolerance in mice lacking p27 kip1. Rejected allografts from p27 kip1−/− mice contained more CD4+ T lymphocytes and exhibited more tissue damage than allografts from tolerant, wild-type mice. Infiltrating p27 kip1-deficient T cells, but not wild-type T cells, exhibited nuclear expression of cyclins E and A, indicating uncontrolled T cell cycle progression in the graft. The failure of tolerance in p27 kip1−/− mice was also accompanied by markedly increased numbers of allospecific, IFN-γ-producing cells in the periphery, and occurred despite apparently normal regulatory T cell activity. These data demonstrate that the CDK inhibitor p27 kip1 enforces the costimulatory requirement for the expansion and differentiation of alloimmune effector T lymphocytes in vivo, and point to CDKs as novel targets for immunosuppressive or tolerance-inducing therapies.