When suspended in methylcellulose, primary mouse keratinocytes cease proliferation and differentiate. Suspension also reduces the activity of the cyclin-dependent kinase cdk2, an important cell cycle regulatory enzyme. To determine how suspension modulates these events, we examined its effects on wild-type keratinocytes and keratinocytes nullizygous for the cdk2 inhibitor p21(Cip1). After suspension of cycling cells, amounts of cyclin A (a cdk2 partner), cyclin A mRNA, and cyclin A-associated activity decreased much more rapidly in the presence than in the absence of p21(Cip1). Neither suspension nor p21(Cip1) status affected the stability of cyclin A mRNA. Loss of p21(Cip1) reduced the capacity of suspended cells to growth arrest, differentiate, and accumulate p27(Kip1) (a second cdk2 inhibitor) and affected the composition of E2F DNA binding complexes. Cyclin A-cdk2 complexes in suspended p21(+/+) cells contained p21(Cip1) or p27(Kip1), whereas most of the cyclin A-cdk2 complexes in p21(-/-) cells lacked p27(Kip1). Ectopic expression of p21(Cip1) allowed p21(-/-) keratinocytes to efficiently down-regulate cyclin A and differentiate when placed in suspension. These findings show that p21(Cip1) mediates the effects of suspension on numerous processes in primary keratinocytes including cdk2 activity, cyclin A expression, cell cycle progression, and differentiation.