Previous studies from our laboratory showed that p21Cip1/WAF1 can be phosphorylated by Pim-1 kinase in vitro, implying that part of the function of Pim-1 might involve influencing the cell cycle. In the present study, site-directed mutagenesis and phosphorylated-specific antibodies were used as tools to identify the sites phosphorylated by Pim-1 and the consequences of this phosphorylation. What we found was that Pim-1 can efficiently phosphorylate p21 on Thr145 in vitro using recombinant protein and in vivo in intact cells. Unexpectedly, we found that Ser146 is a second site that is phosphorylated in vivo, but this phosphorylation event seems to be an indirect result of Pim-1 expression. More importantly, the consequences of phosphorylation of either Thr145 or Ser146 are distinct. When p21 is phosphorylated on Thr145, it localizes to the nucleus and results in the disruption of the association between proliferating cell nuclear antigen and p21. Furthermore, phosphorylation of Thr145 promotes stabilization of p21. On the other hand, when p21 is phosphorylated on Ser146, it localizes primarily in the cytoplasm and the effect of phosphorylation on stability is minimal. Cotransfection of wild-type Pim-1 with p21 increases the rate of proliferation compared with cotransfection of p21 with kinase-dead Pim-1. Knocking down Pim-1 expression greatly decreases the rate of proliferation of H1299 cells and their ability to grow in soft agar. These data suggest that Pim-1 overexpression may contribute to tumorigenesis in part by influencing the cellular localization and stability of p21 and by promoting cell proliferation.