Cells cope with replication-blocking lesions via translesion DNA synthesis (TLS). TLS is carried out by low-fidelity DNA polymerases that replicate across lesions, thereby preventing genome instability at the cost of increased point mutations. Here we perform a two-stage siRNA-based functional screen for mammalian TLS genes and identify 17 validated TLS genes. One of the genes, NPM1, is frequently mutated in acute myeloid leukaemia (AML). We show that NPM1 (nucleophosmin) regulates TLS via interaction with the catalytic core of DNA polymerase-η (polη), and that NPM1 deficiency causes a TLS defect due to proteasomal degradation of polη. Moreover, the prevalent NPM1c+ mutation that causes NPM1 mislocalization in ~30% of AML patients results in excessive degradation of polη. These results establish the role of NPM1 as a key TLS regulator, and suggest a mechanism for the better prognosis of AML patients carrying mutations in NPM1.