In this paper we show that DNA polymerase lambda (pol lambda) interacts with proliferating cell nuclear antigen (PCNA) in vivo in human cells. Moreover, by using recombinant mutated PCNA, we could demonstrate that pol lambda interacts with both the interdomain-connecting loop and the nearby hydrophobic pocket on the anterior of PCNA and that critical residues within a helix-hairpin-helix domain of pol lambda, important for proper DNA primer binding, are also involved in the enzyme's interaction with PCNA. Finally, we show that the tumor suppressor protein p21(WAF1/CIP1) can efficiently compete in vitro with pol lambda for binding to PCNA. Given the high rate of frameshift mutations induced by pol lambda and its ability to bypass abasic sites, accurate regulation of pol lambda activity by PCNA and p21 concerted action might be important for preventing genetic instability.