dacapo encodes a CIP/KIP-type inhibitor of Cyclin E/Cdk2 complexes in Drosophila melanogaster. In the embryonic epidermis, dacapo expression starts during G2 of the final division cycle and is required for the arrest of cell cycle progression in G1 after the final mitosis. The onset of dacapo transcription is the earliest event known to be required for the epidermal cell proliferation arrest. To advance our understanding of the regulatory mechanisms that terminate cell proliferation at the appropriate stage, we have analyzed the control of dacapo transcription. We show that dacapo transcription is not coupled to cell cycle progression. It is not affected in mutants where proliferation is arrested either too early or too late. Moreover, upregulation of dacapo expression is not an obligatory event of the cell cycle exit process. During early development of the central nervous system, we cannot detect p27Dacapo during the final division cycle of ganglion mother cells, while it is expressed at later stages. The control of dacapo expression therefore varies in different stages and tissues. The dacapo regulatory region includes many independent cis-regulatory elements. The elements that control epidermal expression integrate developmental cues that time the arrest of cell proliferation.