The small GTPase Rho is important for cell cycle progression and Ras transformation in fibroblasts. However, it is unclear whether Rho is needed for proliferation in other cell types, and its targets in promoting normal cell cycle progression are unknown. Here, we demonstrate that Rho is required for G1 to S progression in MCF10A mammary epithelial cells, both in response to EGF and in response to oncogenic Ras. We describe two effects of Rho, the repression of p21(CIP1) and the induction of cyclin D1, that may underlie its role in promoting S phase entry. The Rho inhibitor, C3 exotransferase, induced p21(CIP1) both in EGF-stimulated and V12Ras-expressing cells. In addition, C3 blocked EGF-stimulated cyclin D1 promoter activity whereas V14RhoA induced the cyclin D1 promoter and cooperated with V12Ras in cyclin D1 induction. Finally, a high proportion of cells co-expressing V14RhoA and V12Ras displayed lobulated, polyploid nuclei that were actively synthesizing DNA. Our results demonstrate that Rho plays a fundamental role in promoting Ras-dependent S phase entry in mammary epithelial cells, whether in response to normal or oncogenic signaling, and indicate that in cells expressing oncogenic Ras, the activation of Rho diminishes p21(CIP1) expression, increases cyclin D1 promoter activity, and uncouples DNA synthesis from mitosis.