In many tissues, progenitor cells permanently withdraw from the cell cycle prior to commitment towards a differentiated phenotype. In the oligodendrocyte lineage a counting mechanism has been proposed, linking the number of cell divisions to growth arrest and differentiation. A direct prediction of this model is that an increase in the number of cell divisions would result in a delayed onset of differentiation. Since the cell cycle inhibitor p27Kip1 is an essential component of the machinery leading to oligodendrocyte progenitor growth arrest, we examined the temporal relationship between cell cycle withdrawal and expression of late differentiation markers in vivo, in mice carrying a targeted deletion in the p27Kip1 gene. Using bromodeoxyuridine to label proliferating cells, quaking (QKI) to identify embryonic glial progenitors, NG2 to identify neonatal oligodendrocyte progenitors, and myelin basic protein to label differentiated oligodendrocytes, we found an increased number of proliferating QKI- and NG2-positive cells in germinal zones of p27Kip1(−/−) mice at the peak of gliogenesis. However, no delay was observed in these mice in the appearance of the late differentiation marker myelin basic protein in the developing corpus callosum and cerebellum. Significantly, a decrease in cyclin E levels was observed in the brain of p27Kip1 null mice coincident with oligodendrocyte growth arrest. We conclude that two distinct modalities of growth arrest occur in the oligodendrocyte lineage: a p27Kip1-dependent mechanism of growth arrest affecting proliferation in early phases of gliogenesis, and a p27Kip1-independent event leading to withdrawal from the cell cycle and differentiation.