Cyclic AMP (cAMP) blocks the mitogenic effects of colony-stimulating factor 1 (CSF-1) in macrophages, inducing cell cycle arrest in mid-G1 phase. Complexes between cyclin D1 and cyclin-dependent kinase 4 (cdk4) assemble in growth arrested cells, but cdk4 is not phosphorylated in vivo by the cdk-activating kinase (CAK) and remains inactive. Although undetectable in lysates of cAMP-treated cells, active CAK is recovered after antibody precipitation, indicating that it is not the direct target of inhibition. Levels of the cdk inhibitor p27(Kip1) increase in cAMP-treated cells, and its immunodepletion from inhibitory lysates restores CAK-mediated cdk4 activation. Kip1 does not bind to CAK, but its association with cyclin D-cdk4 prevents CAK from phosphorylating and activating the holoenzyme.