BACKGROUND Mitosis is regulated by MPF (maturation promoting factor), the active form of Cdc2/28-cyclin B complexes. Increasing levels of cyclin B abundance and the loss of inhibitory phosphates from Cdc2/28 drives cells into mitosis, whereas cyclin B destruction inactivates MPF and drives cells out of mitosis. Cells with defective spindles are arrested in mitosis by the spindle-assembly checkpoint, which prevents the destruction of mitotic cyclins and the inactivation of MPF. We have investigated the relationship between the spindle-assembly checkpoint, cyclin destruction, inhibitory phosphorylation of Cdc2/28, and exit from mitosis. RESULTS The previously characterized budding yeast mad mutants lack the spindle-assembly checkpoint. Spindle depolymerization does not arrest them in mitosis because they cannot stabilize cyclin B. In contrast, a newly isolated mutant in the budding yeast CDC55 gene, which encodes a protein phosphatase 2A (PP2A) regulatory subunit, shows a different checkpoint defect. In the presence of a defective spindle, these cells separate their sister chromatids and leave mitosis without inducing cyclin B destruction. Despite the persistence of B-type cyclins, cdc55 mutant cells inactivate MPF. Two experiments show that this inactivation is due to inhibitory phosphorylation on Cdc28: phosphotyrosine accumulates on Cdc28 in cdc55 delta cells whose spindles have been depolymerized, and a cdc28 mutant that lacks inhibitory phosphorylation sites on Cdc28 allows spindle defects to arrest cdc55 mutants in mitosis with active MPF and unseparated sister chromatids. CONCLUSIONS We conclude that perturbations of protein phosphatase activity allow MPF to be inactivated by inhibitory phosphorylation instead of by cyclin destruction. Under these conditions, sister chromatid separation appears to be regulated by MPF activity rather than by protein degradation. We discuss the role of PP2A and Cdc28 phosphorylation in cell-cycle control, and the possibility that the novel mitotic exit pathway plays a role in adaptation to prolonged activation of the spindle-assembly checkpoint.