A key asset of cytotoxic drugs in cancer therapeutics is their ability to discriminate between proliferating and mitotically inert cells and eliminate preferentially neoplastic ones. We have designed a high throughput-compatible mammalian cell-based assay for the discovery of cytotoxic drugs, which selectively kill proliferation-competent target cells. This cytotoxic drug discovery assay is based on a transgenic CHO-K1-derived cell line engineered for a conditional G1-specific growth arrest following tetracycline-responsive overexpression of the human cyclin-dependent kinase inhibitor p27(Kip1). The CHO-derived cell line CHO-p27(Kip1) shows wild type proliferation rates and can be expanded in the presence of tetracycline antibiotics when p27(Kip1) expression is repressed. Upon withdrawal of regulating antibiotics CHO-p27(Kip1) differentiates into a 1:1 mixed population consisting of two different proliferation phenotypes: (i) a G1-arrested cell population induced by heterologous expression of p27(Kip1) which mimics mitotically inactive terminally differentiated cells and (ii) a proliferation-competent cell population which eliminated the p27(Kip1) expression unit and imitates neoplastic cell characteristics. Addition of chemical or metabolic libraries to CHO-p27(Kip1) populations cultivated in tetracycline-free medium followed by scoring for cell viability will reveal cytotoxic drug candidates associated with a high viability ratio of proliferation-competent/arrested populations. We have validated the cell-based cytotoxic drug discovery assay using the clinically licensed cancer drugs mitomycin C, doxorubicin, etoposide and 5-fluorouracil. Comparative proof-of-concept studies showed that these top-prescribed cancer therapeutics preferentially eliminate proliferating cells while showing less interference with the viability of G1-arrested cell populations. These results demonstrate the CHO-p27(Kip1)-based cytotoxic drug finder technology is ready-to-apply for high throughput screenings of chemical as well as metabolic libraries to discover novel cancer therapeutics which show reduced cytotoxicity on terminally differentiated cells.