Transgenic expression of activated AKT1 in the murine prostate induces prostatic intraepithelial neoplasia (PIN) that does not progress to invasive prostate cancer (CaP). In luminal epithelial cells of Akt-driven PIN, we show the concomitant induction of p27Kip1 and senescence. Genetic ablation of p27Kip1 led to downregulation of senescence markers and progression to cancer. In humans, p27Kip1 and senescence markers were elevated in PIN not associated with CaP but were decreased or absent, respectively, in cancer-associated PIN and in CaP. Importantly, p27Kip1 upregulation in mouse and human in situ lesions did not depend upon mTOR or Akt activation but was instead specifically associated with alterations in cell polarity, architecture, and adhesion molecules. These data suggest that a p27Kip1-driven checkpoint limits progression of PIN to CaP.