The low molecular weight (LMW) isoforms of cyclin E are unique to cancer cells. In breast cancer, such alteration of cyclin E is a very strong predictor of poor patient outcome. Here we show that alteration in binding properties of these LMW isoforms to CDK2 and the CDK inhibitors (CKIs), p21 and p27, results in their functional hyperactivity. The LMW forms of cyclin E are severalfold more effective at binding to CDK2. Additionally, compared with the full-length cyclin E-CDK2 complexes, the LMW cyclin E-CDK2 complexes are significantly more resistant to inhibition by p21 and p27, despite equal binding of the CKIs to the LMW complexes. When both the full-length and the LMW cyclin E are co-expressed, p27 preferentially binds to the LMW forms yet is unable to inhibit the CDK2 activity. Thus, the LMW forms of cyclin E may contribute to tumorigenesis through their resistance to the inhibitory activities of p21 and p27 while sequestering these CKIs from the full-length cyclin E.