Myc oncoproteins are commonly activated in malignancies and are sufficient to provoke many types of cancer. However, the critical mechanisms by which Myc contributes to malignant transformation are not clear. DNA damage seems to be an important initiating event in tumorigenesis. Here, we show that although Myc does not directly induce double-stranded DNA breaks, it does augment activation of the Atm/p53 DNA damage response pathway, suggesting that Atm may function as a guardian against Myc-induced transformation. Indeed, we show that Atm loss augments Myc-induced lymphomagenesis and impairs Myc-induced apoptosis, which normally harnesses Myc-driven tumorigenesis. Surprisingly, Atm loss also augments the proliferative response induced by Myc, and this augmentation is associated with enhanced suppression of the expression of the cyclin-dependent kinase inhibitor p27(Kip1). Therefore, regulation of cell proliferation and p27(Kip1) seems to be a contributing mechanism by which Atm holds tumor formation in check.