Glucocorticoids are known to impair the postnatal development of lung parenchyma by altering the formation of alveoli, and from the current understanding of the processes controlling the growth of the alveolar structure, it is likely that this impairment relies in large part on alteration of alveolar epithelial cell replication. From recent studies on the modulation of cell proliferation by glucocorticoids, it appears that events associated with the G1 phase of the cell cycle are a major target for the actions of these hormones. To gain some insights into the mechanisms involved in the growth arrest of lung alveolar epithelial cells by glucocorticoids, we focused in the present study on the effects of these hormones on the expression of the G1 cyclins and their cell cycle-dependent kinases (CDKs). We observed that when cells were blocked in their proliferation by dexamethasone treatment, no changes in the expression of the various G1 cyclins, D1, D2, D3, or E, could be documented. Also, the levels of CDK2 and CDK4 in glucocorticoid-treated cells did not exhibit significant modifications compared with the levels in proliferating cells. Evaluation of the activity of cyclin-CDK complexes showed that activation of cyclin D-CDK4 was not modified by dexamethasone. By contrast, differences in the activity of cyclin E-CDK2 complexes were found, with a profound decrease in the extracts of cells growth arrested by dexamethasone. Studies of the factors potentially implicated in the inactivation of these complexes strongly suggested a role for p21CIP1, as a dramatic accumulation of this protein was observed in cells treated with dexamethasone. Moreover, changes in p21CIP1 expression appeared to be controlled mostly at the posttranscriptional level. Interestingly, a decrease in the levels of p27KIP1 could be observed. These results indicate that glucocorticoids block entry of alveolar epithelial cells into S phase by specifically altering the activation of cyclin E-CDK2 complexes through induction of the CDK inhibitor p21CIP1.