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^Cip1and 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 G₁CDKs—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^Kip1binding, accumulation of hypo-phosphorylated retinoblastoma protein, and G₁ 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 G₁ growth arrest. Further, the data imply that p21^Cip1 may have a function independent of growth arrest during erythroid differentiation.