Steel factor (SLF) is a hematopoietic cytokine that synergizes with other growth factors to induce a greatly enhanced proliferative state of hematopoietic progenitor cells and factor-dependent cell lines. Even though the in vivo importance of SLF in the maintenance and responsiveness of stem and progenitor cells is well documented, the molecular mechanism involved in its synergistic effects are mainly unknown. Some factor-dependent myeloid cell lines respond to the synergistic proliferative effects of SLF plus other cytokines in a manner similar to that of normal myeloid progenitor cells from bone marrow and cord blood. We show here that SLF can synergize with granulocyte-macrophage colony-stimulating factor (GM-CSF) to induce an enhanced phosphorylation of the retinoblastoma gene product and a synergistic increase in the total intracellular protein level of the cyclin-dependent kinase inhibitor, p21cip-1, which is correlated with a simultaneous decrease in p27kip-1 in the human factor-dependent myeloid cell line, M07e. Moreover, these cytokines synergize to increase p21cip- 1 binding and decrease p27kip-1 binding to cyclin-dependent kinase-2 (cdk2), an enzyme required for normal cell cycle progression; these inverse events correlated with increased cdk2 kinase activity. It is also shown that exogenous purified p21cip-1 can displace p27kip-1 already bound to cdk2 in vitro. These data implicate increased p21cip-1 and decreased p27kip-1 intracellular concentrations and their stoichiometric interplay in the enhanced proliferative status of cells stimulated by the combination of SLF and GM-CSF. In support of these findings, it is shown that hematopoietic progenitor cells from mice lacking p21cip-1 are defective in SLF synergistic proliferative response in vitro. Moreover, the cycling status of marrow and spleen progenitors and absolute numbers of marrow progenitors were significantly decreased in the p21cip-1 -/-, compared with the +/+ mice. We conclude that the cdk threshold regulators p21cip-1 and p27kip- 1 play a critical role in the normal mitogenic response of M07e cells and murine myeloid progenitor cells to these cytokines and particularly in the SLF synergistic proliferative response that is important to the normal maintenance of the stem/progenitor cell compartment.