Inorganic arsenic is a ubiquitous environmental contaminant associated with an increased risk of skin hyperkeratosis and cancer. Although several hypotheses that relate to arsenic-induced carcinogenesis have been suggested, the mechanism of action remains obscure. In the present study, molecular mechanisms underlying the inactivation of p53 function and the genomic instability in malignant transformation of the human keratinocyte cell line, HaCaT, induced by low levels of arsenic were investigated. Our results show that long-term exposure of HaCaT cells to sodium arsenite (1.0 microM) increases their proliferation, causes DNA double-strand breaks, and induce anchorage-independent growth. In arsenite-exposed cells, the levels of phospho-p53, p21, and mdm2 increase at early times after exposure. The levels, however, decrease with longer times. Interaction of the promoter of mot-2 (a p53 inhibitor) with nuclear factor kappaB (NF-kappaB) was established by Southwestern and Western blot assays. Blockage of NF-kappaB prevents the increases of arsenite-induced mot-2 levels, and knockdown of mot-2 facilitates the nuclear translocation of p53, indicating that, in HaCaT cells exposed to arsenite, NF-kappaB inhibits p53 function by mot-2. Moreover, inactivation of NF-kappaB facilitated p53-mediated DNA repair and prevented arsenite-induced malignant transformation. Together, the results suggest that the repressive effect of NF-kappaB on p53 by mot-2 leads to genomic instability, which is involved in arsenite-induced malignant transformation of human keratinocytes.