We have recently identified nc886 (pre-miR-886 or vtRNA2-1) as a novel type of non-coding RNA that inhibits activation of protein kinase R (PKR). PKR's pro-apoptotic role through eukaryotic initiation factor 2 α (eIF2α) phosphorylation is well established in the host defense against viral infection. Paradoxically, some cancer patients have elevated PKR activity; however, its cause and consequence are not understood. Initially, we evaluated the expression of nc886, PKR and eIF2α in non-malignant cholangiocyte and cholangiocarcinoma (CCA) cells. nc886 is repressed in CCA cells and this repression is the cause of PKR's activation therein. nc886 alone is necessary and sufficient for suppression of PKR via direct physical interaction. Consistently, artificial suppression of nc886 in cholangiocyte cells activates the canonical PKR/eIF2α cell death pathway, suggesting a potential significance of the nc886 suppression and the consequent PKR activation in eliminating pre-malignant cells during tumorigenesis. In comparison, active PKR in CCA cells does not induce phospho-eIF2α nor apoptosis, but promotes the pro-survival nuclear factor-κB pathway. Thus, PKR has a dual life or death role during tumorigenesis. Similarly to the CCA cell lines, nc886 tends to be decreased but PKR tends to be activated in our clinical samples from CCA patients. Collectively from our data, we propose a tumor surveillance model for nc886's role in the PKR pathway during tumorigenesis.