Medulloblastoma, a brain tumor arising in the cerebellum, is the most common solid childhood malignancy.  The current standard of care for medulloblastoma leaves survivors with life-long side effects.  Gaining insight into mechanisms regulating transformation of medulloblastoma cells-of-origin may lead to development of better treatments for these tumors.  Cerebellar granule neuron precursors (CGNPs) are proposed cells-of-origin for certain classes of medulloblastoma, specifically those marked by aberrant Sonic hedgehog (Shh) signaling pathway activation.  CGNPs require signaling by Shh for proliferation during brain development.  In mitogen-stimulated cells, nuclear localized cyclin dependent kinase (cdk) inhibitor p27 (Kip1) functions as a checkpoint control at the G1- to S-phase transition by inhibiting cdk2.  Recent studies have suggested cytoplasmically localized p27^kip1 acquires oncogenic functions.  Here, we show that p27^Kip1 is cytoplasmically localized in CGNPs and mouse Shh-mediated medulloblastomas.  Tranasgenic mice bearing an activating mutation in the Shh pathway and lacking one or both p27^Kip1 alleles have accelerated tumor incidence compared to mice bearing both p27^Kip1 alleles.  Interestingly, mice heterozygous for p27^Kip1 have decreased survival latency compared to p27^Kip1-null animals.  Our data indicate that this may reflect the requirement for at least one copy of p27^Kip1 for recruiting cyclin D/cdk4/6 to promote cell cycle progression yet insufficient expression in the heterozygous or null state to inhibit cyclin E/cdk2.  Finally, we find that mis-localized p27^Kip1 may play a positive role in motility in medulloblastoma cells.  Together, our data indicate that the dosage of p27^Kip1 plays a role in cell cycle progression and tumor suppression in Shh-mediated medulloblastoma expansion.