Mammalian cells generally require both mitogens and anchorage signals in order to proliferate. An important characteristic of many tumour cells is that they have lost this anchorage-dependent cell-cycle checkpoint, allowing them to proliferate without signals provided by their normal microenvironment. In the absence of anchorage signals from the extracellular matrix, many cell types arrest cell-cycle progression in G1 phase as a result of Rb-dependent checkpoints. However, despite inactivation of p53 and Rb proteins, SV40LT-expressing cells retain anchorage dependency, suggesting the presence of an uncharacterised cell-cycle checkpoint, which can be overridden by coexpression of oncogenic Ras. We report here that, although cyclin-CDK complexes persisted in suspension, proliferation was inhibited in LT-expressing cells by the CDK inhibitor p27(Kip1) (p27). Interestingly, this did not induce a stable arrest, but aberrant cell-cycle progression associated with stalled DNA replication, rereplication and chromosomal instability, which was sufficient to increase the frequency of oncogenic transformation. These results firstly indicate loss of anchorage in Rb- and p53-deficient cells as a novel mechanism for promotion of genomic instability; secondly suggest that anchorage checkpoints that protect normal cells from inappropriate proliferation act deleteriously in Rb- and p53-deficient cells to promote tumourigenesis; and thirdly indicate caution in the use of CDK inhibitors for cancer treatment.