Many long noncoding RNA (lncRNA) genes exist near cancer-associated loci, yet evidence connecting lncRNA functions to recurrent genetic alterations in cancer are lacking. Here, we report that DINO, the lncRNA transcribed from the cancer-associated DINO/CDKN1A locus, suppresses tumor formation independent of p21, the protein encoded at the locus. Loss of one or two alleles of Dino impairs p53 signaling and apoptosis, resulting in a haplo-insufficient tumor suppressor phenotype in genetically defined mouse models of tumorigenesis. A discrete region of the DINO/CDKN1A locus is recurrently hypermethylated in human cancers, silencing DINO but not CDKN1A, the gene encoding p21. Hypermethylation silences DINO, impairs p53 signaling pathway in trans, and is mutually exclusive with TP53 alterations, indicating that DINO and TP53 comprise a common tumor suppressor module. Therefore, DINO encodes a lncRNA essential for tumor suppression that is recurrently silenced in human cancers as a mechanism to escape p53-dependent tumor suppression.