PALB2/FANCN is mutated in breast and pancreatic cancers and Fanconi anemia (FA). It controls the intranuclear localization, stability, and DNA repair function of BRCA2 and links BRCA1 and BRCA2 in DNA homologous recombination repair and breast cancer suppression. Here, we show that PALB2 directly interacts with KEAP1, an oxidative stress sensor that binds and represses the master antioxidant transcription factor NRF2. PALB2 shares with NRF2 a highly conserved ETGE-type KEAP1 binding motif and can effectively compete with NRF2 for KEAP1 binding. PALB2 promotes NRF2 accumulation and function in the nucleus and lowers the cellular reactive oxygen species (ROS) level. In addition, PALB2 also regulates the rate of NRF2 export from the nucleus following induction. Our findings identify PALB2 as a regulator of cellular redox homeostasis and provide a new link between oxidative stress and the development of cancer and FA.