Tuberous sclerosis complex (TSC) is an autosomally inherited disorder that causes tumors to form in many organs. It is frequently caused by inactivating mutations in the TSC2 tumor-suppressor gene. TSC2 negatively regulates the activity of the GTPase Rheb and thereby inhibits mammalian target of rapamycin complex 1 (mTORC1) signaling. Activation of mTORC1 as a result of lack of TSC2 function is observed in TSC and sporadic lymphangioleiomyomatosis (LAM). TSC2 deficiency has recently been associated with elevated AMP-activated protein kinase (AMPK) activity, which in turn correlated with cytoplasmic localization of p27Kip1 (p27), a negative regulator of cyclin-dependent kinase 2 (Cdk2). How AMPK in the absence of TSC2 is stimulated is not fully understood. In this study, we demonstrate that Rheb activates AMPK and reduces p27 levels in Tsc2-null cells. Importantly, both effects occur largely independent of mTORC1. Furthermore, increased p27 levels following Rheb depletion correlated with reduced Cdk2 activity and cell proliferation in vitro, and with inhibition of tumor formation by Tsc2-null cells in vivo. Taken together, our data suggest that Rheb controls proliferation of TSC2-deficient cells by a mechanism that involves regulation of AMPK and p27, and that Rheb is a potential target for TSC/LAM therapy.