The p53 tumor suppressor is an important regulator of cellular response to chemotherapeutic agents by virtue of the protein's ability, upon activation by phosphorylation, to transcriptionally activate a number of genes involved in cell proliferation, apoptosis, and metabolism. Transcriptome analysis following introduction of a constitutively active form of p53 (p53T18D/S20D) into colon carcinoma cell lines identified transcriptional activation of the carboxylesterase 2 (CES-2) gene, which is involved in drug metabolism. We examined whether p53 activated by the DNA-damaging drug 5-fluorouracil (5-FU) also induces CES-2 expression. Our experiments showed that 5-FU induced CES-2 expression in two colon carcinoma cell lines that express wild-type p53 (HCT116 p53(+/+) and RKO) but not in five lines that are p53-null (HCT116 p53(-/- )) or express mutated p53 (HT29, KM12C, KM12SM, and KM12L4A). Sequence analysis revealed a putative p53-binding element in the first intron of CES-2 that differed from consensus by one nucleotide. A reporter gene assay showed that the luciferase construct with the p53-binding element responded to 5-FU treatment, whereas the reporter construct without the binding element did not. Chromatin immunoprecipitation assay confirmed that p53 bound the CES-2 fragment containing the p53-binding element after 5-FU treatment, whereas p21 binding to p53 was present with or without chemotherapy. Knockdown of expression of CES-2 and p53 by small interference RNA in RKO and HCT116 p53(+/+) cells attenuated the anti-proliferation effects of CPT11. These results taken together show that activated p53 directly regulates CES-2 expression via a p53-binding site, representing a novel mechanism through which the p53 pathway modulates drug metabolism. In addition, the degree of homology in the p53-binding element may determine the strength of p53 regulation.