Esophageal Cancer-Related Gene 2 (ECRG2) is a recently identified tumor suppressor, its regulation and involvement in DNA damage response are unknown. Here, we show that DNA damage-induced ECRG2 upregulation coincided with p53 activation and occurred in a p53-dependent manner. We identified two p53-binding sites within ECRG2 promoter and found the promoter activity, mRNA, and protein expression to be regulated by p53. We show that DNA damage significantly enhanced p53 binding to ECRG2 promoter at the anticipated p53-binding sites. We identified a novel natural ECRG2 promoter variant harboring a small deletion that exists in the genomes of ~38.5% of world population and showed this variant to be defective in responding to p53 and DNA-damage. ECRG2 overexpression induced cancer cell death; ECRG2 gene disruption enhanced cell survival following anticancer drug treatments even when p53 was induced. We showed that lower expression of ECRG2 in multiple human malignancies correlated with reduced disease-free survival in patients. Collectively, our novel findings indicate that ECRG2 is an important target of p53 during DNA damage-induced response and plays a critical role in influencing cancer cell sensitivity to DNA damage-inducing cancer therapeutics.