Activation of stress-activated protein kinases (SAPKs) is essential for proper cell adaptation to extracellular stimuli. The exposure of yeast cells to high osmolarity, or mutations that lead to activation of the Hog1 SAPK, result in cell-cycle arrest. The mechanisms by which Hog1 and SAPKs in general regulate cell-cycle progression are not completely understood. Here we show that Hog1 regulates cell cycle progression at the G1 phase by a dual mechanism that involves downregulation of cyclin expression and direct targeting of the CDK-inhibitor protein Sic1. Hog1 interacts physically with Sic1 in vivo and in vitro, and phosphorylates a single residue at the carboxyl terminus of Sic1, which, in combination with the downregulation of cyclin expression, results in Sic1 stabilization and inhibition of cell-cycle progression. Cells lacking Sic1 or containing a Sic1 allele mutated in the Hog1 phosphorylation site are unable to arrest at G1 phase after Hog1 activation, and become sensitive to osmostress. Together, our data indicate that the Sic1 CDK-inhibitor is the molecular target for the SAPK Hog1 that is required to modulate cell-cycle progression in response to stress.