The Saccharomyces cerevisiae gene CDC28 encodes a protein kinase required for progression from G1 to S phase in the cell cycle. We present evidence that the active form of the Cdc28 protein kinase is a complex of approximately 160 kd containing an endogenous substrate, p40, and possibly other polypeptides. This complex phosphorylates p40 and exogenous histone H1 in vitro. Cell cycle arrest during G1 results in inactivation of the protein kinase accompanied by the disassembly of the complex. Furthermore, assembly of the complex is regulated during the cell cycle, reaching a maximum during G1. Partial complexes thought to be intermediates in the assembly process phosphorylate histone H1 but not p40. Addition of soluble factors to these partial complexes in vitro restores p40 phosphorylation and causes the complex to increase to the mature size. A model is presented in which p40 phosphorylation is required during G1 for cells to initiate a new cell cycle.