Cell differentiation and proliferation are fundamental to the development of multicellular organisms. While studies in various non-mammalian species show that development can proceed despite disrupted cell cycle progression, the extent to which normal cell cycle dynamics are required in mammals remains unclear. Using mouse gastruloids, we examined the effects of cell cycle inhibition on development. Despite near-complete growth arrest, gastruloids still underwent symmetry breaking, elongation, and germ layer specification, indicating that core differentiation programs are robust to growth inhibition. However, microscopy and single-cell transcriptomics revealed consistent alterations in cell type proportions, including delayed differentiation and reduced mesodermal populations. To investigate the origin of these changes, we used the differential kinetics of unspliced and spliced cycling transcripts to compare proliferation rates between cell types. While differences in proliferation partly explained the imbalance, our analysis showed that cell cycle perturbations also modulate lineage-specific differentiation timing and efficiency, highlighting a regulatory role of cell cycle dynamics in mammalian development.