Cell-penetrating peptides (CPPs) are capable of introducing a wide range of cargoes into living cells. Descriptions of the internalization process vary from energy-independent cell penetration of membranes to endocytic uptake. To elucidate whether the mechanism of entry of CPP constructs might be influenced by the properties of the cargo, we used time lapse confocal microscopy analysis of living mammalian cells to directly compare the uptake of the well-studied CPP TAT fused to a protein (>50 amino acids) or peptide (<50 amino acids) cargo. We also analyzed various constructs for their subcellular distribution and mobility after the internalization event. TAT fusion proteins were taken up largely into cytoplasmic vesicles whereas peptides fused to TAT entered the cell in a rapid manner that was dependent on membrane potential. Despite their accumulation in the nucleolus, photobleaching of TAT fusion peptides revealed their mobility. The bioavailability of internalized TAT peptides was tested and confirmed by the strong inhibitory effect on cell cycle progression of two TAT fusion peptides derived from the tumor suppressor p21(WAF/Cip) and DNA Ligase I measured in living cells.