The intracellular level of p27(Kip1), a cyclin-dependent kinase (CDK) inhibitory protein, is rapidly reduced at the G1/S transition phase when the cell cycle pause ceases. In this study, we demonstrated that two posttranslational mechanisms were involved in p27(Kip1) breakdown: degradation via the ubiquitin (Ub)-proteasome pathway and proteolytic processing that rapidly eliminates the cyclin-binding domain. We confirmed that p27(Kip1) was ubiquitinated in vitro as well as in vivo. The p27(Kip1) -ubiquitination activity was higher at the G1/S boundary than during the G0/G1 phase, and p27(Kip1) ubiquitination was reduced significantly when the lysine residues at positions 134, 153, and 165 were replaced by arginine, suggesting that these lysine residues are the targets for Ub conjugation. In parallel with its Ub-dependent degradation, p27(Kip1) was processed rapidly at its N terminus, reducing its molecular mass from 27 to 22 kDa, by a ubiquitination-independent but adenosine triphosphate (ATP)-dependent mechanism with higher activity during the S than the G0/G1 phase. This 22-kDa intermediate had no cyclin-binding domain at its N terminus and virtually no CDK2 kinase inhibitory activity. These results suggest that p27(Kip1) is eliminated by two independent mechanisms, ubiquitin-mediated degradation and ubiquitin-independent processing, during progression from the G1 to S phase.