DDX3 is a DEAD box RNA helicase with diverse biological functions. Using colony formation assay, our results revealed that DDX3 inhibited the colony formation ability of various tumor cells, and this inhibition might be due to a reduced growth rate caused by DDX3. Additionally, we identified p21 waf1/cip1, a cyclin-dependent kinase inhibitor, as a target gene of DDX3, and the up-regulation of p21waf1/cip1 expression accounted for the colony-suppressing activity of DDX3. Moreover, DDX3 exerted its transactivation function on p21waf1/cip1 promoter through an ATPase-dependent but helicase-independent mechanism, and the four Sp1 sites located within the -123 to -63 region, relative to the transcription start site of p21waf1/cip1 promoter, were essential for the response to DDX3. Furthermore, DDX3 interacted and cooperated with Sp1 to up-regulate the promoter activity of p21waf1/cip1. To determine the relevance of DDX3 in clinical cancers, the expression profile of DDX3 in various tumors was also examined. A declined expression of DDX3 mRNA and protein was found in ∼58% to 73% of hepatoma specimens, which led to the reduction of p21 waf1/cip1 expression in a manner independent of p53 status. Additionally, an alteration of subcellular localization from nuclei to cytoplasm was also observed in >70% of cutaneous squamous cell carcinoma samples. Because DDX3 exhibits tumor suppressor functions, such as a growth-suppressive property and transcriptional activation of the p21 waf1/cip1 promoter, and is inactivated through down-regulation of gene expression or alteration of subcellular localization in tumor cells, all these features together suggest that DDX3 might be a candidate tumor suppressor.