Tumor necrosis factor-α-induced protein 8 (TNFAIP8) is a stress-response gene that has been associated with cancer, but no studies have differentiated among or defined the regulation or function of any of its several recently described expression variants. We found that TNFAIP8 variant 2 (v2) is overexpressed in multiple human cancers, whereas other variants are commonly downregulated in cancer (v1) or minimally expressed in cancer or normal tissue (v3-v6). Silencing v2 in cancer cells induces p53-independent inhibition of DNA synthesis, widespread binding of p53, and induction of target genes and p53-dependent cell cycle arrest and DNA damage sensitization. Cell cycle arrest induced by v2 silencing requires p53-dependent induction of p21. In response to the chemotherapeutic agent doxorubicin, p53 regulates v2 through binding to an intragenic enhancer, together indicating that p53 and v2 engage in complex reciprocal regulation. We propose that TNFAIP8 v2 promotes human cancer by broadly repressing p53 function, in essence offsetting p53-dependent tumor suppression.