To gain insight into the essential functions of E2F, we have examined the phenotypes caused by complete inactivation of E2F and DP family members in Drosophila. Our results show that dDP requires dE2F1 and dE2F2 for DNA-binding activity in vitro and in vivo. In tissue culture cells and in mutant animals, the levels of dE2F and dDP proteins are strongly interdependent. In the absence of dDP, the levels of dE2F1 and dE2F2 decline dramatically, and vice versa. Accordingly, the cell cycle and transcriptional phenotypes caused by targeting dDP mimic the effects of targeting both dE2F1 and dE2F2 and are indistinguishable from the effects of inactivating all three proteins. Although trans-heterozygous dDP mutant animals develop to late pupal stages, the analysis of somatic mutant clones shows that dDP mutant cells are at a severe proliferative disadvantage when compared directly with wild-type neighbors. Strikingly, the timing of S-phase entry or exit is not delayed in dDP mutant clones, nor is the accumulation of cyclin A or cyclin B. However, the maximal level of bromodeoxyuridine incorporation is reduced in dDP mutant clones, and RNA interference experiments show that dDP-depleted cells are prone to stall in S phase. In addition, dDP mutant clones contain reduced numbers of mitotic cells, indicating that dDP mutant cells have a defect in G2/M-phase progression. Thus, dDP is not essential for developmental control of the G1-to-S transition, but it is required for normal cell proliferation, for optimal DNA synthesis, and for efficient G2/M progression.