Cdc25A, a phosphatase essential for G1-S transition, associates with, dephosphorylates, and activates the cell cycle kinase cyclin E-cdk2. p21CIP1 and p27 are cyclin-dependent kinase (cdk) inhibitors induced by growth-suppressive signals such as p53 and transforming growth factor beta (TGF-beta). We have identified a cyclin binding motif near the N terminus of Cdc25A that is similar to the cyclin binding Cy (or RR LFG) motif of the p21CIP1 family of cdk inhibitors and separate from the catalytic domain. Mutations in this motif disrupt the association of Cdc25A with cyclin E- or cyclin A-cdk2 in vitro and in vivo and selectively interfere with the dephosphorylation of cyclin E-cdk2. A peptide based on the Cy motif of p21 competitively disrupts the association of Cdc25A with cyclin-cdks and inhibits the dephosphorylation of the kinase. p21 inhibits Cdc25A-cyclin-cdk2 association and the dephosphorylation of cdk2. Conversely, Cdc25A, which is itself an oncogene up-regulated by the Myc oncogene, associates with cyclin-cdk and protects it from inhibition by p21. Cdc25A also protects DNA replication in Xenopus egg extracts from inhibition by p21. These results describe a mechanism by which the Myc- or Cdc25A-induced oncogenic and p53- or TGF-beta-induced growth-suppressive pathways counterbalance each other by competing for cyclin-cdks.