The DREAM complex is an important regulator of mitotic gene expression during the cell cycle. Here we report that inactivation of LIN9, a subunit of DREAM, results in premature senescence, which can be overcome by the SV40 large T (LT) antigen. Together with the observation that p16 INK4a and p21 Waf1 are upregulated upon loss of LIN9, these results indicate that senescence is triggered by the pRB and p53 tumor suppressor pathways. We also find that LIN9-null cells that escape senescence are chromosomally instable because of compromised mitotic fidelity. SV40 LT-expressing cells that adapt to the loss of LIN9 can grow anchorage-independently in soft agar, a hallmark of oncogenic transformation. Taken together, these results suggest an important role of mitotic gene regulation in the maintenance of genomic stability and tumor suppression.