The DNA damage response (DDR) helps to maintain genome integrity, suppress tumorigenesis and mediate the radiotherapeutic and chemotherapeutic effects on cancer. Here we report that p57Kip2, a cyclin-dependent kinase (CDK) inhibitor implicated in the development of tumor-prone Beckwith-Wiedemann syndrome, is an effector molecule of the DNA-damage response. Genotoxic stress induces p57Kip2 expression via the bone morphogenetic protein-Smad1 and Atm-p38MAPK-Atf2 pathways in p53-proficient or -deficient cells and requires the Smad1-Atf2 complex that facilitates their recruitment to the p57Kip2 promoter. Elevated p57Kip2 induces G1/S phase cell cycle arrest but inhibits cell death in response to DNA damage and acts in parallel with p53 to suppress cell transformation and tumor formation. p57Kip2 is also upregulated in stage I and II clinical rectal tumor samples, likely due to genome instability of precancerous and/or early cancer cells. Targeting p57Kip2 in primary rectal cancer cells and tumor models resulted in increased sensitivity to doxorubicin, suggesting that p57Kip2 has a role in chemoresistance, which is consistent with its pro-survival function. These findings place p57Kip2 in DDR and uncover molecular mechanisms by which p57Kip2 suppresses tumorigenesis and causes chemoresistance.