Taspase1 was identified as the threonine endopeptidase that cleaves mixed-lineage leukemia (MLL) for proper Hox gene expression in vitro. To investigate its functions in vivo, we generated Taspase1(-/-) mice. Taspase1 deficiency results in noncleavage (nc) of MLL and MLL2 and homeotic transformations. Remarkably, our in vivo studies uncover an unexpected role of Taspase1 in the cell cycle. Taspase1(-/-) animals are smaller in size. Taspase1(-/-) mouse embryonic fibroblasts (MEFs) exhibit impaired proliferation, and acute deletion of Taspase1 leads to a marked reduction of thymocytes. Taspase1 deficiency incurs down-regulation of Cyclin Es, As, and Bs and up-regulation of p16(Ink4a) . We show that MLL and MLL2 directly target E2Fs for Cyclin expression. The uncleaved precursor MLL displays a reduced histone H3 methyl transferase activity in vitro. Accordingly, chromatin immunoprecipitation assays demonstrate a markedly decreased histone H3 K4 trimethylation at Cyclin E1 and E2 genes in Taspase1(-/-) cells. Furthermore, MLL(nc/nc;2nc/nc) MEFs are also impaired in proliferation. Our data are consistent with a model in which precursor MLLs, activated by Taspase1, target to Cyclins through E2Fs to methylate histone H3 at K4, leading to activation. Lastly, Taspase1(-/-) cells are resistant to oncogenic transformation, and Taspase1 is overexpressed in many cancer cell lines. Thus, Taspase1 may serve as a target for cancer therapeutics.