Accumulating evidence suggests that phosphatases play an important role in regulating a variety of signal transduction pathways that have a bearing on cancer. The kinase-associated phosphatase (KAP) is a human dual-specificity protein phosphatase that was identified as a Cdc2-or Cdk2-interacting protein by a yeast two-hybrid screening, yet the biological significance of these interactions remains elusive. We have identified the KAP gene as an overexpressed gene in breast and prostate cancer by using a phosphatase domain-specific differential-display PCR strategy. Here we report that breast and prostate malignancies are associated with high levels of KAP expression. The sublocalization of KAP is variable. In normal cells, KAP is primarily found in the perinuclear region, but in tumor cells, a significant portion of KAP is found in the cytoplasm. Blocking KAP expression by antisense KAP in a tetracycline-regulatable system results in a reduced population of S-phase cells and reduced Cdk2 kinase activity. Furthermore, lowering KAP expression led to inhibition of the transformed phenotype, with reduced anchorage-independent growth and tumorigenic potential in athymic nude mice. These findings suggest that therapeutic intervention might be aimed at repression of KAP gene overexpression in human breast and prostate cancer.Human cancer development is a multistage process that results from the stepwise acquisition of genetic alterations. These alterations may involve the dysregulation of a variety of normal cellular functions, leading to the initiation and progression of a tumor. Among normal cellular functions, regulatory control of the cell cycle plays an important role in normal cell proliferation, and genetic alterations that affect cell cycle control have been shown to be associated with tumor progression (reviewed in references 26, 28, 30, 32, 44, and 46). The transition from one stage of the cell cycle to another is regulated by the transcription of a number of cyclin genes, the degradation of cyclin proteins, and the modification of the cyclin-dependent kinase proteins by phosphorylation (reviewed in references 11, 29, and 30). These controls play important roles in preventing tumorigenesis (26,28,30,31).Cell cycle progression in mammals requires multiple cyclindependent kinases (Cdks) (44). The activity of these kinases depends on their association with a family of positive regulatory protein subunits known as cyclins during the cell cycle. Proteins that interact with Cdks play distinct and specific roles in cell cycle regulation. Among these, the mammalian G 1 Cdk inhibitors have been shown to be involved in diverse processes such as repair of DNA damage, differentiation, tumor suppression, and cellular senescence (12,22,24,25,37,52). The identification of these negative regulators of Cdks has provided key insights into how the cell cycle can be controlled.A Cdk-interacting protein called KAP/Cdi1 was first identified as a novel G 1 -and S-phase dual-specificity phosphatase that associates with Cdk2 and/or Cdc...