Cyclin-dependent kinase (CDK) inhibitor p27Kip1 binds to the cyclin E.CDK2 complex and plays a major role in controlling cell cycle and cell growth. Our group and others have reported that anti-HER2 monoclonal antibodies exert inhibitory effects on HER2-overexpressing breast cancers through G1 cell cycle arrest associated with induction of p27Kip1 and reduction of CDK2. The role of p27Kip1 in anti-HER2 antibody-induced cell cycle arrest and growth inhibition is, however, still uncertain. Here we have provided several lines of evidence supporting a critical role for p27Kip1 in the anti-HER2 antibody-induced G1 cell cycle arrest and tumor growth inhibition. Induction of p27Kip1 and G1 growth arrest by anti-HER2 antibody, murine 4D5, or humanized trastuzumab (Herceptin) are concentration-dependent, time-dependent, irreversible, and long-lasting. The magnitude of G1 cell cycle arrest induced by trastuzumab or 4D5 is well correlated with the level of p27Kip1 protein induced. Up-regulation of p27Kip1 and G1 growth arrest could no longer be removed with as little as 14 h of treatment with trastuzumab. Anti-HER2 antibody-induced p27Kip1 protein, G1 arrest, and growth inhibition persist at least 5 days after a single treatment. The magnitude of growth inhibition of breast cancer cells induced by anti-HER2 antibody closely parallels the level of p27Kip1 induced. Induced expression of exogenous p27Kip1 results in a p27Kip1 level-dependent G1 cell cycle arrest and growth inhibition similar to that obtained with anti-HER2 antibodies. Reducing p27Kip1 expression using p27Kip1 small interfering RNA blocks anti-HER2 antibody-induced p27Kip1 up-regulation and G1 arrest. Treatment with anti-HER2 antibody significantly increases the half-life of p27Kip1 protein. Inhibition of ubiquitin-proteasome pathway, but not inhibition of calpain and caspase activities, up-regulates p27Kip1 protein to a degree comparable with that obtained with anti-HER2 antibodies. We have further demonstrated that anti-HER2 antibody significantly decreases threonine phosphorylation of p27Kip1 protein at position 187 (Thr-187) and increases serine phosphorylation of p27Kip1 protein at position 10 (Ser-10). Expression of S10A and T187A mutant p27Kip1 protein increases the fraction of cells in G1 and reduces a further antibody-induced G1 arrest. Consequently, p27Kip1 plays an important role in the anti-HER2 antibody-induced G1 cell cycle arrest and tumor growth inhibition through post-translational regulation. Regulation of the phosphorylation of p27Kip1 protein is one of the post-translational mechanisms by which anti-HER2 antibody upregulates the protein.