BACKGROUND & AIMS: Reduced p27(kip1) expression is a marker of poor prognosis in colorectal neoplasia, and inactivation of p27 in mice (p27(Delta51/Delta51)) causes increased intestinal epithelial cell proliferation and small and large intestinal neoplasia in a diet-dependent manner. Here, we addressed the role of p27 in untransformed intestinal epithelial cells in vivo and the consequence of its targeted inactivation. METHODS: A sequential fractionation procedure was used to isolate murine intestinal epithelial cells relative to their position along the crypt-villus axis, and the levels of cyclins, cyclin-dependent kinases (cdks), and cdk inhibitors and of the complexes formed among them was determined by immunoprecipitation-immunoblotting and kinase assays. RESULTS: As cells exited the proliferative crypt compartment, expression and activity of both cdk2 and cdk4 decreased, in parallel with reduced expression of cyclin A and proliferating cell nuclear antigen (PCNA); expression of cyclin D1, D2, and cyclin E showed little change. As expected, expression of the cdk inhibitors p21, p57, and p16 was highest in differentiated villus cells. Unexpectedly, p27 protein expression was highest in cells of the proliferative crypt compartment where it bound both cdk2 and cdk4. Cdk2 activity was increased in crypt cells from p27(Delta51/Delta51) mice, although cyclin D-associated kinase activity was unchanged (indeed, cyclin D1/2-cdk4 complex levels were reduced). Importantly, cdk2 activity was unchanged in crypt cells from p21(-/-) mice, which do not develop intestinal tumors. CONCLUSIONS: We propose that p27 contributes to intestinal epithelial homeostasis by regulating cdk2 activity in proliferating cells, thus gating cell cycle progression and suppressing intestinal neoplasia.