The PTEN tumor suppressor functions as a phosphatase of phosphatidylinositol 3,4,5-trisphosphate (PIP3) and negatively regulates the PI 3-kinase signaling pathway. Our previous studies showed that PTEN expression causes accumulation of cyclin-dependent kinase inhibitor p27(Kip1) and G(1) cell cycle arrest. Here, we show that PTEN negatively regulates expression of cyclin D1 and that cyclin D1 plays a unique role in p27 proteolysis. Coexpression of cyclin D1, but not cyclin E, is sufficient to restore p27 levels in PTEN-expressing cells. Conversely, loss of cyclin D1 by siRNA causes p27 accumulation. Silencing of the cyclin D1 gene or inhibition of the PI 3-kinase pathway prevents formation of the SCF(SKP2) complex, with a simultaneous increase in CUL1 binding to CAND1. CAND1-CUL1 binding is known to block the accessibility of CUL1 to SKP1 and (SKP2). We have found that CUL1 is less neddylated in cells that have lost cyclin D1 expression. Using an in vitro extract system, we found that the extracts prepared from cells lacking cyclin D1 have reduced activity to neddylate CUL1, in a manner similar to extracts from cells treated with a PI 3-kinase inhibitor or in G(0) resting cells. Consistently, the steady state levels of CUL1 neddylation were found lower under these conditions. Our studies reveal that PTEN/PI 3-kinase signaling and cyclin D1 control a novel pathway that regulates assembly of the SCF(SKP2) complex by modulating cullin neddylation and CAND1 binding at the G(1)/S cell cycle transition.