Rapamycin and its derivatives are promising anticancer agents, but the exact mechanisms by which these drugs induce cell cycle arrest and inhibit tumor growth are unknown. A biochemical analysis of human mammary tumor cell lines indicated that rapamycin-induced antiproliferative effects correlated with down-regulation of cellular p21 levels and the levels of p21 in cyclin-dependent kinase (Cdk) 2 and 4 complexes. Cyclin D1 overexpression reversed rapamycin action and this reversal correlated with increased levels of cellular p21, higher levels of p21 associated with Cdk2, and stabilization of cyclin D1/Cdk2/p21/proliferating cell nuclear antigen (PCNA) complexes. Experiments using a novel cyclin D1-Cdk2 fusion protein or a kinase-dead mutant of the fusion protein indicated that reversal of rapamycin action required not only the formation of complexes with p21 and PCNA but also complex-associated kinase activity. Similar results were observed in vivo. The rapamycin derivative RAD001 (everolimus) inhibited the growth of mouse mammary tumors, which correlated with the disruption of cyclin D1/Cdk2 complexes. The potential implications of these results with respect to the use of rapamycin derivatives in breast cancer therapy are discussed.