The xeroderma pigmentosum group E gene product DDB2, a protein involved in nucleotide excision repair (NER), associates with the E3 ubiquitin ligase complex Cul4A-DDB1. But the precise role of these interactions in the NER activity of DDB2 is unclear. Several models, including DDB2-mediated ubiquitination of histones in UV-irradiated cells, have been proposed. But those models lack clear genetic evidence. Here we show that DDB2 participates in NER by regulating the cellular levels of p21(Waf1/Cip1). We show that DDB2 enhances nuclear accumulation of DDB1, which binds to a modified form of p53 containing phosphorylation at Ser18 (p53(S18P)) and targets it for degradation in low-dose-UV-irradiated cells. DDB2(-/-) mouse embryonic fibroblasts (MEFs), unlike wild-type MEFs, are deficient in the proteolysis of p53(S18P). Accumulation of p53(S18P) in DDB2(-/-) MEFs causes higher expression p21(Waf1/Cip1). We show that the increased expression of p21(Waf1/Cip1) is the cause NER deficiency in DDB2(-/-) cells because deletion or knockdown of p21(Waf1/Cip1) reverses their NER-deficient phenotype. p21(Waf1/Cip1) was shown to bind PCNA, which is required for both DNA replication and NER. Moreover, an increased level of p21(Waf1/Cip1) was shown to inhibit NER both in vitro and in vivo. Our results provide genetic evidence linking the regulation of p21(Waf1/Cip1) to the NER activity of DDB2.