Most cell types in multicellular eukaryotes exit from the mitotic cell cycle before terminal differentiation. We show that the dacapo gene is required to arrest the epidermal cell proliferation at the correct developmental 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 unable to express the inhibitor fail to arrest cell proliferation after mitosis 16 and progress through an extra division cycle. Conversely, premature dacapo expression in transgenic embryos results in a precocious G1 arrest.
