Most cell types in multicellular eukaryotes exit from the mitotic cell
cycle before terminal differentiation. We show that the dacapo gene i
s required to arrest the epidermal cell proliferation at the correct d
evelopmental stage during Drosophila embryogenesis. dacapo encodes an
inhibitor of cyclin E/cdk2 complexes with similarity to the vertebrate
Cip/Kip inhibitors. dacapo is transiently expressed beginning late in
the G2 phase preceding the terminal division (mitosis 16). Mutants un
able to express the inhibitor fail to arrest cell proliferation after
mitosis 16 and progress through an extra division cycle. Conversely, p
remature dacapo expression in transgenic embryos results in a precocio
us G1 arrest.