The human T-lymphotropic virus type 1 (HTLV-1) Tax binds the anaphase promoting complex (APC) and activates it ahead of schedule. Here, we show that APC activation by Tax induces rapid senescence (tax-IRS) independently of p53 and pRB. In response to tax, cyclin A, cyclin B1, securin, and Skp2 becomes polyubiquitinated and degraded starting in S phase. This is followed by a surge in p21(CIP1/WAF1) and p27(KIP1) in mid to late S and G2/M leading to a permanent G1 arrest. Tax-positive HTLV-1-transformed T-cell lines express elevated levels of p21(CIP1/WAF1), but low levels of p27(KIP1). Finally, Tax can be stably expressed in p27(KIP1)-null NIH3T3 cells. These results indicate that APC activation by Tax causes inactivation of SCF(Skp2) and stabilization of p21(CIP1/WAF1) and p27(KIP1). The build-up of p21(CIP1/WAF1) and especially p27(KIP1) commits cells to senescence. Evading tax-IRS through a loss of p27(KIP1) function is likely to be critical for cell transformation by Tax and development of adult T-cell leukemia after HTLV-1 infection. Finally, activation of APC ahead of schedule may be exploited to arrest cancer cell growth.