Mice lacking p27^Kip1 have been created by gene targeting in embryonic stem cells. These mice are larger than the control animals, with thymus, pituitary, and adrenal glands and gonadal organs exhibiting striking enlargement. CDK2 activity is elevated about 10-fold in p27^−/− thymocytes. Development of ovarian follicles seems to be impaired, resulting in female sterility. Similar to mice with the Rb mutation, the p27^−/− mice often develop pituitary tumors spontaneously. The retinas of the mutant mice show a disturbed organization of the normal cellular layer pattern. These findings indicate that p27^Kip1 acts to regulate the growth of a variety of cells. Unexpectedly, the cell cycle arrest mediated by TGFβ, rapamycin, or contact inhibition remained intact in p27^−/− cells, suggesting that p27^Kip1 is not required in these pathways.