Programmed cell death 5 (PDCD5) is believed to play a crucial role in p53 activation; however, the underlying mechanism of how PDCD5 function is regulated during apoptosis remains obscure. Here, we report that the serine/threonine phosphatase PPEF-1 interacts with and dephosphorylates PDCD5 at Ser-119, which leads to PDCD5 destabilization. Overexpression of wild-type PPEF-1, but not inactive PPEF-1D172N, efficiently suppressed CK2α-mediated stabilization of PDCD5 and p53-mediated apoptosis in response to etoposide (ET). Conversely, PPEF-1 knockdown further enhanced genotoxic stress responses. Notably, PPEF-1 suppressed p53-mediated genotoxic stress response via negative regulation of PDCD5. We also determined that overexpression of wild-type PPEF-1, but not inactive PPEF-1D172N, significantly increased tumorigenic growth and chemoresistance of A549 human lung carcinoma cells. Collectively, these data demonstrate that PPEF-1 plays a pivotal role in tumorigenesis of lung cancer cells by reducing PDCD5-mediated genotoxic stress responses.