Normal progression through the cell cycle requires the sequential action of cyclin-dependent kinases CDK1, CDK2, CDK4, and CDK6. Direct or indirect deregulation of CDK activity is a feature of almost all cancers and has led to the development of CDK inhibitors as anticancer agents. The CDK-activating kinase (CAK) plays a critical role in regulating cell cycle by mediating the activating phosphorylation of CDK1, CDK2, CDK4, and CDK6. As such, CDK7, which also regulates transcription as part of the TFIIH basal transcription factor, is an attractive target for the development of anticancer drugs. Computer modeling of the CDK7 structure was used to design potential potent CDK7 inhibitors. Here, we show that a pyrazolo[1,5-a]pyrimidine-derived compound, BS-181, inhibited CAK activity with an IC(50) of 21 nmol/L. Testing of other CDKs as well as another 69 kinases showed that BS-181 only inhibited CDK2 at concentrations lower than 1 micromol/L, with CDK2 being inhibited 35-fold less potently (IC(50) 880 nmol/L) than CDK7. In MCF-7 cells, BS-181 inhibited the phosphorylation of CDK7 substrates, promoted cell cycle arrest and apoptosis to inhibit the growth of cancer cell lines, and showed antitumor effects in vivo. The drug was stable in vivo with a plasma elimination half-life in mice of 405 minutes after i.p. administration of 10 mg/kg. The same dose of drug inhibited the growth of MCF-7 human xenografts in nude mice. BS-181 therefore provides the first example of a potent and selective CDK7 inhibitor with potential as an anticancer agent.