The proteasome activator REGγ mediates a shortcut for the destruction of intact mammalian proteins. The biological roles of REGγ and the underlying mechanisms are not fully understood. Here we provide evidence that REGγ regulates cellular distribution of p53 by facilitating its multiple monoubiquitylation and subsequent nuclear export and degradation. We also show that inhibition of p53 tetramerization by REGγ might further enhance cytoplasmic relocation of p53 and reduce active p53 in the nucleus. Furthermore, multiple monoubiquitylation of p53 enhances its physical interaction with HDM2 and probably facilitates subsequent polyubiquitylation of p53, suggesting that monoubiquitylation can act as a signal for p53 degradation. Depletion of REGγ sensitizes cells to stress-induced apoptosis, validating its crucial role in the control of apoptosis, probably through regulation of p53 function. Using a mouse xenograft model, we show that REGγ knockdown results in a significant reduction of tumor growth, suggesting an important role for REGγ in tumor development. Our study therefore demonstrates that REGγ-mediated inactivation of p53 is one of the mechanisms involved in cancer progression.