TSPYL5, encoding testis-specific Y-like protein, has been postulated to be a tumor suppressor gene, and its hypermethylation is often associated with human disease, especially cancer. In this study, we report that the TSPYL5 gene was less methylated (30%) in A549 lung adenocarcinoma cells, which are relatively resistant to gamma-radiation, than in H460 lung cancer cells, in which the TSPYL5 gene was hypermethylated (95%); thus, the expression level of TSPYL5 is much higher in A549 cells than in H460 cells. We showed that TSPYL5 suppression with silencing RNA in A549 cells up-regulated cellular PTEN, followed by down-regulation of AKT activation. Therefore, blockage of TSPYL5 sensitized A549 cells to cytotoxic agents such as gamma-radiation. In addition, TSPYL5 suppression also showed an increased level of p21(WAF1/Cip1) and subsequently induced inhibition of cell growth in A549 cells. The overexpression of TSPYL5 in H460 cells showed the opposite effects. This study provides the first demonstration that TSPYL5 modulates cell growth and sensitization of cells to the detrimental effects of damaging agents via regulation of p21(WAF1/Cip1) and PTEN/AKT pathway.