Both the heterodimeric transcription factor, E2F, and the G1 cyclin, cyclin E, are required for the G1-S transition at the start of the metazoan cell cycle. It has been established that cyclin E can act as an upstream activator of E2F. In addition to this action, we show here that cyclin E has an essential role in DNA replication distinct from activating E2F. We have created transgenic Drosophila capable of inducible, ectopic production of E2F activity. Simultaneous overexpression of both Drosophila E2F subunits, dE2F and dDP, in embryos stimulated the expression of multiple E2F-target genes including cyclin E, and also caused the initiation of S phase. Mutation of cyclin E prevented the initiation of S phase after overexpression of dE2F/dDP without affecting induction of target gene expression. Thus, E2F-directed transcription cannot bypass loss of cyclin E in Drosophila embryos.