Activity of Cdk5, which is essential for CNS development, depends on its association with p35 (or truncated p25) or p39, but the regulatory mechanisms whereby Cdk5 is activated have not yet been fully elucidated. Studies on PC12 cells showed that Cdk5/p25 activity is modulated by an unidentified kinase that phosphorylates Cdk5 at Ser159 and enhances its kinase activity (Sharma et al., 1999 PNAS USA 96,11156). In this study, we have partially purified a bovine brain enzyme that can phosphorylate the Cdk5(149-163) peptide but not the Cdk5(149-163)A159 peptide. The enzyme, which contains Cdk7, cyclin H, and Mat1, specifically phosphorylates Ser159 of Cdk5(149-163) and enhances Cdk5/p25 activity. The active Cdk7-containing enzyme also phosphorylates and activates wt Cdk5 but not mutated Cdk5(Ser159Ala). Likewise, Cdk7 or cyclin H immunoprecipitate from mouse brain specifically phosphorylates wt Cdk5 at Ser159 and enhances Cdk5/p25 activity. Conversely, blocked Cdk7 immunoprecipitate does not phosphorylate nor activate Cdk5. In addition, the Cdk7 substrate, CTD of RNAPII, causes a dose-dependent decline in Cdk5 activation by Cdk7. These findings indicate that Cdk7 functions as a Cdk5 activating kinase in brain. Indeed, elevated Cdk5 activity in the developing E18 mouse brain coincides with increased Cdk7 kinase activity.