We apply standard disk formation theory with adiabatic contraction within cuspy halo models predicted by the standard cold dark matter (ΛCDM) cosmology. The resulting models are confronted with the broad range of observational data available for the Milky Way and M31 galaxies. We find that there is a narrow range of parameters that can satisfy the observational constraints, but within this range, the models score remarkably well. Our favored models have virial masses of 1012 and 1.6×1012 Msolar for the Galaxy and for M31, respectively, average spin parameters λ~0.03-0.05, and concentrations Cvir=10-17, typical for halos of this mass in the standard ΛCDM cosmology. The models require neither dark matter modifications nor flat cores to fit the observational data. We explore two types of models, with and without the exchange of angular momentum between the dark matter and the baryons. The models without exchange give reasonable rotation curves, fulfill constraints in the solar neighborhood, and satisfy constraints at larger radii, but they may be problematic for fast rotating central bars. We explore models in which the baryons experience additional contraction due to loss of angular momentum to the surrounding dark matter. These models produce similar global properties, but the dark matter is only a 25% of the total mass in the central 3 kpc region, allowing a fast rotating bar to persist. According to preliminary calculations, our model galaxies probably have sufficient baryonic mass in the central ~3.5 kpc to reproduce recent observational values of the optical depth to microlensing events toward the Galactic center. Our dynamical models unequivocally require that about 50% of all the gas inside the virial radius must not be in the disk or in the bulge, a result that is obtained naturally in standard semianalytic models. Assuming that the Milky Way is ``typical,'' we investigate whether the range of virial masses allowed by our dynamical models is compatible with constraints from the galaxy luminosity function. We find that if the Milky Way has a luminosity MK=-24.0, then these constraints are satisfied, but if it is more luminous (as expected if it lies on the Tully-Fisher relation), then the predicted space density is larger than the observed space density of galaxies of the corresponding luminosity by a factor of 1.5-2. We conclude that observed rotation curves and dynamical properties of ``normal'' spiral galaxies appear to be consistent with standard ΛCDM.