Regulation of the DNA damage response and cell cycle progression is critical for maintaining genome integrity. Here we report that in response to DNA damage, COPS5 deubiquitinates and stabilizes PEA15 in an ATM kinase-dependent manner. PEA15 expression oscillates throughout the cell cycle, and the loss of PEA15 accelerates cell cycle progression by activating CDK6 expression via the c-JUN transcription factor. Cells lacking PEA15 exhibit a DNA damage-induced G2/M checkpoint defect due to increased CDC25C activity and consequentially higher CDK1/Cyclin B activity and accordingly have an increased rate of spontaneous mutagenesis. We find that oncogenic RAS inhibits PEA15 expression and ectopic PEA15 expression blocks RAS-mediated transformation, which can be partially rescued by ectopic expression of CDK6. Finally, we show that PEA15 expression is down regulated in colon, breast and lung cancer samples. Collectively, our results demonstrate that tumor suppressor PEA15 is a regulator of genome integrity and is an integral component of the DNA damage response pathway that regulates cell cycle progression, the DNA-damage-induced G2/M checkpoint and cellular transformation.