Phenotypic heterogeneity within a population of genetically identical cells is emerging as a common theme in multiple biological systems, including human cell biology and cancer. Using live-cell imaging, flow cytometry, and kinetic modeling, we showed that two states鈥攓uiescence and cell cycling鈥攃an coexist within an isogenic population of human cells and resulted from low basal expression levels of p21, a Cyclin-dependent kinase (CDK) inhibitor (CKI). We attribute the p21-dependent heterogeneity in cell cycle activity to double-negative feedback regulation involving CDK2, p21, and E3 ubiquitin ligases. In support of this mechanism, analysis of cells at a point before cell cycle entry (i.e., before the G1/S transition) revealed a p21鈥揅DK2 axis that determines quiescent and cycling cell states. Our findings suggest a mechanistic role for p21 in generating heterogeneity in both normal tissues and tumors.