p21(Waf1/Cip1) plays central roles in proliferation, differentiation, and apoptosis. Alterations in the expression and subcellular localisation of p21 occur during several lung diseases but the roles of p21 in the lung epithelium are unknown. The effects of p21 on proliferation and apoptosis in mouse airway epithelial cells (AECs) were examined using p21-null mice. AECs isolated from p21-null mice had increased proliferation and apoptotic rates compared to AECs from wild-type mice. Alterations in the subcellular localization of the cell cycle regulatory proteins p27, PCNA, and p53 were also evident in p21(-/-) cells. The nuclear and cytoplasmic forms of p21 present in AECs were also examined. Full-length p21 (20 kDa) was detected in nuclear fractions but a C-terminal truncated form (17 kDa) of p21 was present in cytoplasmic fractions. The binding activities of truncated p21 were altered compared to full-length p21. Although the latter was complexed with PCNA, Cdk2, Cdk4, Cdk6, cyclin D3, and cyclin E, truncated p21 was bound only to Cdk4 and cyclin D3. In conclusion, p21 regulates proliferation and protects against apoptosis in AECs. In addition, different forms of p21 are present in AECs and the subcellular localization of these forms reflects differences in p21 activity.