The protein p21(Cip1, Waf1, Sdi1) is a potent inhibitor of cyclin-dependent kinases (CDKs). p21 can also block DNA replication through its interaction with the proliferating cell nuclear antigen (PCNA), which is an auxiliary factor for polymerase delta. PCNA is also implicated in the repair resynthesis step of nucleotide excision repair (NER). Previous studies have yielded contradictory results on whether p21 regulates NER through its interaction with PCNA. Resolution of this controversy is of interest because it would help understand how DNA repair and replication are regulated. Hence, we have investigated the effect of p21 on NER both in vitro and in vivo using purified fragments of p21 containing either the CDK-binding domain (N terminus) or the PCNA binding domain (C terminus) of the protein. In the in vitro studies, DNA repair synthesis was measured in extracts from normal human fibroblasts using plasmids damaged by UV irradiation. In the in vivo studies, we used intact and permeabilized cells. The results show that the C terminus of the p21 protein inhibits NER both in vitro and in vivo. These are the first in vivo studies in which this question has been examined, and we demonstrate that inhibition of NER by p21 is not merely an artificial in vitro effect. A 50% inhibition of in vitro NER occurred at a 50:1 molar ratio of p21 C-terminus fragment to PCNA monomer. p21 differentially regulates DNA repair and replication, with repair being much less sensitive to inhibition than replication. Our in vivo results suggest that the inhibition occurs at the resynthesis step of the repair process. It also appears that preassembly of PCNA at repair sites mitigates the inhibitory effect of p21. We further demonstrate that the inhibition of DNA repair is mediated via binding of p21 to PCNA. The N terminus of p21 had no effect on DNA repair, and the inhibition of DNA repair by the C terminus of p21 was relieved by the addition of purified PCNA protein.