IFI16 is a member of the HIN-200 family (hematopoietic interferon-inducible nuclear antigens with 200 amino acid repeats) that contains a DNA binding domain, a transcriptional regulatory domain, and DAPIN/PAAD, a protein domain associated with interferon response. It can function as a transcription repressor and directly binds p53. Although the structural and biochemical properties of IFI16 are known, the physiological relevance of these properties in the cellular context is still elusive. Here we report that the inhibition of endogenous IFI16 expression by small interfering RNA (siRNA) induces p21Waf1 mRNA and protein expression through p53 but does not induce pro-apoptotic p53 target genes. This rapid induction of p21 was wild-type p53-dependent and resulted in cell cycle arrest along with a marked reduction of phosphorylated Rb in normally growing cells. We also showed that the repression of IFI16 affects p53 transcriptional activity at the p21 promoter as well as the protein stability of p53 and p21. Our findings identified a new role for IFI16 in modulating p53 function and its target gene regulation in the control of cell cycle regulation.