Ectopic expression of Jab1/CSN5 induces specific down-regulation of the cyclin-dependent kinase (Cdk) inhibitor p27 (p27(Kip1)) in a manner dependent upon transportation from the nucleus to the cytoplasm. Here we show that Grb2 and Grb3-3, the molecules functioning as an adaptor in the signal transduction pathway, specifically and directly bind to p27 in the cytoplasm and participate in the regulation of p27. The interaction requires the C-terminal SH3-domain of Grb2/3-3 and the proline-rich sequence contained in p27 immediately downstream of the Cdk binding domain. In living cells, enforcement of the cytoplasmic localization of p27, either by artificial manipulation of the nuclear/cytoplasmic transport signal sequence or by coexpression of ectopic Jab1/CSN5, markedly enhances the stable interaction between p27 and Grb2. Overexpression of Grb2 accelerates Jab1/CSN5-mediated degradation of p27, while Grb3-3 expression suppresses it. A p27 mutant unable to bind to Grb2 is transported into the cytoplasm in cells ectopically expressing Jab1/CSN5 but is refractory to the subsequent degradation. These findings indicate that Grb2 participates in a negative regulation of p27 and may directly link the signal transduction pathway with the cell cycle regulatory machinery.