Cell-cycle arrest in quiescence and senescence is largely orchestrated by the retinoblastoma (Rb) tumor-suppressor pathway, but the mechanisms underlying the quiescence-senescence switch remain unclear. Here, we show that the crosstalk between the Rb-AKT-signaling pathways forms this switch by controlling the overlapping functions of FoxO3a and FoxM1 transcription factors in cultured fibroblasts. In the absence of mitogenic signals, although FoxM1 expression is repressed by the Rb pathway, FoxO3a prevents reactive oxygen species (ROS) production by maintaining SOD2 expression, leading to quiescence. However, if the Rb pathway is activated in the presence of mitogenic signals, FoxO3a is also inactivated by AKT, thus reducing SOD2 expression and consequently allowing ROS production. This situation elicits senescence through irreparable DNA damage. We demonstrate that this pathway operates in mouse liver, indicating that this machinery may contribute more broadly to tissue homeostasis in vivo.