Cell division cycle 25B (Cdc25B) phosphatase controls entry into mitosis and regulates recovery from G2-M checkpoint-induced arrest. In the present study, we show that exposure of diploid mouse embryonic fibroblasts (MEF) to the ultimate carcinogen anti-benzo(a)pyrene (BP)-7,8-diol-9,10-epoxide (anti-BPDE) resulted in a concentration- and time-dependent increase in Cdc25B protein levels. Chronic exposure of wild-type (Cdc25B+/+) MEFs to anti-BPDE (0.1 micromol/L) caused neoplastic transformation characterized by colony formation in culture and tumor production in nude mice. In contrast, the Cdc25B null MEFs were resistant to anti-BPDE-induced transformation. Furthermore, a carcinogenic dose of the parent hydrocarbon (BP) increased Cdc25B protein levels in the target organ, lung. The biological importance of elevated Cdc25B levels was documented by the early reentry into mitosis of cells overexpressing ectopic Cdc25B levels even in the presence of DNA damage following anti-BPDE exposure, whereas control cells resumed only after DNA damage was repaired. We conclude that Cdc25B has an essential role in anti-BPDE-induced neoplastic transformation, including regulation of cell cycle resumption in the presence of DNA damage.