Ku80 is a component of the protein complex called DNA-dependent protein kinase, which is involved in DNA double-strand break repair and multiple other functions. Previous studies revealed that Ku80 haplo-insufficient and poly (adenosine diphosphate-ribose) polymerase-null transgenic mice developed hepatocellular carcinoma (HCC) at a high frequency. The role of Ku80 has never been investigated in human HCC. Ku80 expressions in HCC and adjacent liver tissue were investigated by using immunohistochemical staining and western blot. Ku80 was transfected into a Ku80-deficient HCC cell line SMMC7721 cells, and the growth features of the Ku80-expressing cells and vector-transfected cells were studied both in vitro and in vivo. Cell cycle analysis and RNA interference were employed to investigate the mechanisms underlying the growth regulation associated with Ku80 expression. Ku80 was found frequently downregulated in HCC compared with adjacent liver tissue. Ku80 downregulation was significantly correlated with elevated hepatitis B virus-DNA load and severity of liver cirrhosis. Overexpression of Ku80 in SMMC7721 cells significantly suppressed cell proliferation in vitro and in vivo. Ku80 overexpression caused S-phase cell cycle arrest and was associated with upregulation of p53 and p21CIP1/WAF1, and the inhibition of p53 or p21CIP1/WAF1 expression by RNA interference overcame the growth suppression and S-phase arrest in the Ku80-expressing cells. A novel mechanism was revealed that Ku80 functions as a tumor suppressor in HCC by inducing S-phase arrest through a p53-dependent pathway.