CDC25A phosphatase activates multiple cyclin-dependent kinases (CDK) during cell cycle progression. Inactivation of CDC25A by ubiquitin-mediated degradation is a major mechanism of DNA damage-induced S-G₂ checkpoint. Although increased CDC25A expression has been reported in various human cancer tissues, it remains unclear whether CDC25A activation is a critical rate-limiting step of carcinogenesis. To assess the role for CDC25A in cell cycle control and carcinogenesis, we used a Cdc25A-null mouse strain we recently generated. Whereas Cdc25A^−/− mice exhibit early embryonic lethality, Cdc25A^+/− mice show no appreciable developmental defect. Cdc25A^+/− mouse embryonic fibroblasts (MEF) exhibit normal kinetics of cell cycle progression at early passages, modestly enhanced G₂ checkpoint response to DNA damage, and shortened proliferative life span, compared with wild-type MEFs. Importantly, Cdc25A^+/− MEFs are significantly resistant to malignant transformation induced by coexpression of H-ras^V12 and a dominant negative p53 mutant. The rate-limiting role for CDC25A in transformation is further supported by decreased transformation efficiency in MCF-10A human mammary epithelial cells stably expressing CDC25A small interfering RNA. Consistently, Cdc25A^+/− mice show substantially prolonged latency in mammary tumorigenesis induced by MMTV-H-ras or MMTV-neu transgene, whereas MMTV-myc–induced tumorigenesis is not significantly affected by Cdc25A heterozygosity. Mammary tissues of Cdc25A^+/−;MMTV-neu mice before tumor development display less proliferative response to the oncogene with increased tyrosine phosphorylation of CDK1/2, but show no significant change in apoptosis. These results suggest that Cdc25A plays a rate-limiting role in transformation and tumor initiation mediated by ras activation. [Cancer Res 2007;67(14):6605–11]