Mitogen-activated protein kinase (MAPK) modules, composed of three protein kinases activated by successive phosphorylation, are involved in the signal transduction of a wide range of extracellular agents. In mammalian cells, mitogenic stimulation triggers the translocation of p42/p44MAPK from the cytoplasm to the nucleus, whereas the other protein kinases of the module remain cytosolic. Since MAPK has been shown to phosphorylate and activate nuclear targets, such as the transcription factor Elk1, it has been proposed, but not yet demonstrated, that MAPK nuclear translocation could represent a critical step in signal transduction. In this study, we sequestered p42/p44MAPK in the cytoplasm by the expression of a catalytically inactive form of cytoplasmic MAP kinase phosphatase (MKP-3/Pyst-1). Sequestering MAPK in the cytoplasm did not alter its activation or its ability to phosphorylate cytoplasmic substrates of MAPK (p90RSK1 or an engineered cytoplasmic form of Elk1). In contrast, prevention of MAPK nuclear translocation strongly inhibited Elk1-dependent gene transcription and the ability of cells to reinitiate DNA replication in response to growth factors. Thus the relocalization of MAPK to the nucleus appears to be an important regulatory step for mitogen-induced gene expression and cell cycle re-entry.