DNA damage is a well-known initiator of tumorigenesis. Studies have shown that most cancer cells rely on aerobic glycolysis for their bioenergetics. We sought to identify a molecular link between genomic mutations and metabolic alterations in neoplastic transformation. We took advantage of the intrinsic genomic instability arising in xeroderma pigmentosum C (XPC). The XPC protein plays a key role in recognizing DNA damage in nucleotide excision repair, and patients with XPC deficiency have increased incidence of skin cancer and other malignancies. In cultured human keratinocytes, we showed that lentivirus-mediated knockdown of XPC reduced mitochondrial oxidative phosphorylation and increased glycolysis, recapitulating cancer cell metabolism. Accumulation of unrepaired DNA following XPC silencing increased DNA-dependent protein kinase activity, which subsequently activated AKT1 and NADPH oxidase-1 (NOX1), resulting in ROS production and accumulation of specific deletions in mitochondrial DNA (mtDNA) over time. Subcutaneous injection of XPC-deficient keratinocytes into immunodeficient mice led to squamous cell carcinoma formation, demonstrating the tumorigenic potential of transduced cells. Conversely, simultaneous knockdown of either NOX1 or AKT1 blocked the neoplastic transformation induced by XPC silencing. Our results demonstrate that genomic instability resulting from XPC silencing results in activation of AKT1 and subsequently NOX1 to induce ROS generation, mtDNA deletions, and neoplastic transformation in human keratinocytes.