Cell division is controlled by cyclin-dependent kinases (CDKs). In metazoans, S phase onset coincides with activation of Cdk2, whereas Cdk1 triggers mitosis. Both Cdk1 and -2 require cyclin binding and T loop phosphorylation for full activity. The only known CDK-activating kinase (CAK) in metazoans is Cdk7, which is also part of the transcription machinery. To test the requirements for Cdk7 in vivo, we replaced wild-type Cdk7 with a version sensitive to bulky ATP analogs in human cancer cells. Selective inhibition of Cdk7 in G1 prevents activation (but not formation) of Cdk2/cyclin complexes and delays S phase. Inhibiting Cdk7 in G2 blocks entry to mitosis and disrupts Cdk1/cyclin B complex assembly, indicating that the two steps of Cdk1 activation-cyclin binding and T loop phosphorylation-are mutually dependent. Therefore, by combining chemical genetics and homologous gene replacement in somatic cells, we reveal different modes of CDK activation by Cdk7 at two distinct execution points in the cell cycle.