Loss-of-function mutations of p16^INK4a have been identified in a large number of human tumors. An established biochemical function of p16 is its ability to specifically inhibit cyclin D-dependent kinases in vitro, and this inhibition is believed to be the cause of the p16-mediated G₁ cell cycle arrest after reintroduction of p16 into p16-deficient tumor cells. However, a mutant of Cdk4, Cdk4^N158, designed to specifically inhibit cyclin D-dependent kinases through dominant negative interference, was unable to arrest the cell cycle of the same cells (S. van den Heuvel and E. Harlow, Science 262:2050–2054, 1993). In this study, we determined functional differences between p16 and Cdk4^N158. We show that p16 and Cdk4^N158 inhibit the kinase activity of cellular cyclin D1 complexes through different mechanisms. p16 dissociated cyclin D1-Cdk4 complexes with the release of bound p27^KIP1, while Cdk4^N158 formed complexes with cyclin D1 and p27. In cells induced to overexpress p16, a higher portion of cellular p27 formed complexes with cyclin E-Cdk2, and Cdk2-associated kinase activities were correspondingly inhibited. Cells engineered to express moderately elevated levels of cyclin E became resistant to p16-mediated growth suppression. These results demonstrate that inhibition of cyclin D-dependent kinase activity may not be sufficient to cause G₁ arrest in actively proliferating tumor cells. Inhibition of cyclin E-dependent kinases is required in p16-mediated growth suppression.