Cancer genes exert their greatest influence on the cell cycle by targeting regulators of a critical checkpoint in late G₁. Once cells pass this checkpoint, they are fated to replicate DNA and divide. Cancer cells subvert controls at work at this restriction point and remain in cycle. Previously, we showed that RACK1 inhibits the oncogenic Src tyrosine kinase and NIH 3T3 cell growth. RACK1 inhibits cell growth, in part, by prolonging G₀/G₁. Here we show that RACK1 overexpression induces a partial G₁ arrest by suppressing Src activity at the G₁ checkpoint. RACK1 works through Src to inhibit Vav2, Rho GTPases, Stat3, and Myc. Consequently, cyclin D1 and cyclin-dependent kinases 4 and 2 (CDK4 and CDK2, respectively) are suppressed, CDK inhibitor p27 and retinoblastoma protein are activated, E2F1 is sequestered, and G₁/S progression is delayed. Conversely, downregulation of RACK1 by short interference RNA activates Src-mediated signaling, induces Myc and cyclin D1, and accelerates G₁/S progression. RACK1 suppresses Src- but not mitogen-activated protein kinase-dependent platelet-derived growth factor signaling. We also show that Stat3 is required for Rac1 induction of Myc. Our results reveal a novel mechanism of cell cycle control in late G₁ that works via an endogenous inhibitor of the Src kinase.