The p53 tumor suppressor is a key mediator of cellular responses to various stresses. Here, we show that under conditions of basal physiologic and cell-culture stress, p53 inhibits expression of the CD44 cell-surface molecule via binding to a noncanonical p53-binding sequence in the CD44 promoter. This interaction enables an untransformed cell to respond to stress-induced, p53-dependent cytostatic and apoptotic signals that would otherwise be blocked by the actions of CD44. In the absence of p53 function, the resulting derepressed CD44 expression is essential for the growth and tumor-initiating ability of highly tumorigenic mammary epithelial cells. In both tumorigenic and nontumorigenic cells, CD44's expression is positively regulated by p63, a paralogue of p53. Our data indicate that CD44 is a key tumor-promoting agent in transformed tumor cells lacking p53 function. They also suggest that the derepression of CD44 resulting from inactivation of p53 can potentially aid the survival of immortalized, premalignant cells.