The major events of the cell division cycle are triggered by periodic changes in the activity of cyclin-dependent protein kinases (CDKs). In mammals, the members of the CDK family include CDK2 and CDC2, which are thought to be involved in the control of DNA replication and mitosis, respectively. The protein kinase activity of these enzymes is controlled by a complex array of mechanisms. Activation of the CDK catalytic subunit requires association with a positive regulatory subunit (cyclin) and phosphorylation (at Thr 160 in CDK2). This activated complex can be inhibited by additional phosphorylation at Thr 14 and Tyr 15. Here we report the identification of a new mechanism for the regulation of CDK2 activity. We find that CDK2/cyclin complexes in mouse fibroblasts associate tightly with a 20K protein (CAP20). Complexes containing CAP20 were isolated from cell lysates and found to have negligible kinase activity, indicating that CAP20 association in vivo may inhibit CDK2 activity. We purified CAP20 from 3T3 cells and found that low concentrations of the protein completely inhibit the kinase activity of CDK2 in vitro. Thus CAP20 represents a new negative regulatory subunit that inhibits the activity of CDK2/cyclin complexes in mammalian cells.