A balance between survival and proliferative signals maintains a constant number of T lymphocytes that populate the mammalian immune system, a process termed "homeostasis". Central to this process is the availability of a stromal cell product--the cytokine interleukin-7 (IL-7). We recently showed that IL-7, in addition to protecting cells from apoptosis, drives the cell cycling of lymphocytes through regulation of the stability of the phosphatase, Cdc25A, a key activator of cyclin-dependent kinases (cdks). IL-7 achieves this by controlling the activity of p38 MAP kinase (MAPK), which can phosphorylate Cdc25A, triggering its degradation. Sustained expression of Cdc25A had diverse effects: it promoted cell cycling, even in presence of cell cycle inhibitors such p27Kip1, and prevented cell shrinkage in response to cytokine deprivation. Herein we show a role for Cdc25A as a transducer of cytokine-driven proliferation and discuss novel implications for cell growth from the perspective of the requirements for maintenance of lymphocyte homeostasis.