Paclitaxel has been extensively used as an antitumor drug to treat a broad range of epithelial cancers, including breast and cervical cancers. However, the efficacy of this drug is greatly limited by the development of acquired resistance. Identification of the underlying resistance mechanisms may inform the development of new therapies that elicit long-term response of tumors to paclitaxel treatment. Here we report that increased expression of TNFAIP1 (tumor necrosis factor alpha-induced protein 1) confers acquired resistance to paclitaxel. TNFAIP1 is shown to compete with paclitaxel for binding to β-tubulin, thereby preventing paclitaxel-induced tubulin polymerization, cell cycle arrest and ultimate cell death. We also show that expression of TNFAIP1 is regulated by the transcriptional factor Sp1. In a xenograft mouse model, increased expression of TNFAIP1 decreases, whereas knockdown of TNFAIP1 increases tumor response to paclitaxel. Therefore, these results reveal tnfaip1 as a novel paclitaxel-resistance associated gene and suggest that TNFAIP1 may represent a valuable therapeutic target for the treatment of cancer.