Most cells of the dorsal epidermis exit from the mitotic cycle after division 16 in Drosophila embryogenesis. This exit is dependent on the down-regulation of Drosophila cyclin E (DmcycE) during the final mitotic cycle. Ectopic expression of DmcycE after the final mitosis induces entry into S phase and reaccumulation of G2 cyclins and results in progression through a complete additional cell cycle. Conversely, analyses in DmcycE mutant embryos indicate that cyclin E is required for progression through S phase of the mitotic cycle. Moreover, endoreplication, which occurs in late wild-type embryos in the same pattern as DmcycE expression, is not observed in the mutant embryos. Therefore, Drosophila cyclin E, which forms a complex with the Dmcdc2c kinase, controls progression through S phase and its down-regulation limits embryonic proliferation.