Activation of conditional alleles of Myc can induce proliferation in quiescent cells. We now report that induction of Myc in density-arrested fibroblasts triggers rapid hyperphosphorylation of the retinoblastoma protein and activation of both cyclin D1- and cyclin E-associated kinase activities in the absence of significant changes in the amounts of cyclin-cdk complexes. Kinase activation by Myc is blocked by inhibitors of transcription and requires intact DNA binding and heterodimerization domains of Myc. Activation of cyclin E-cdk2 kinase in serum-starved cells occurs in two steps. The first is induced by Myc and involves the release of a 120 kDa cyclin E-cdk2 complex from a 250 kDa inactive complex that is present in starved cells. This is necessary, but not sufficient, to generate full kinase activity, as cdc25 phosphatase activity is limiting in the absence of external growth factors. In vivo cdc25 activity can be supplied by the addition of growth factors. In vitro recombinant cdc25a strongly activates the 120 kDa, but only poorly activates the 250 kDa cyclin E-cdk2 complex. Our data show that two distinct signals, one of which is supplied by Myc, are necessary for consecutive steps during growth factor-induced formation of active cyclin E-cdk2 complexes in G(o)-arrested rodent fibroblasts.