Concurrent mutation of a RAS oncogene and the tumor suppressor p53 is common in tumorigenesis, and inflammation can promote RAS-driven tumorigenesis without the need to mutate p53. Here, we show, using a well-established mutant RAS and an inflammation-driven mouse skin tumor model, that loss of the p53 inhibitor iASPP facilitates tumorigenesis. Specifically, iASPP regulates expression of a subset of p63 and AP1 targets, including genes involved in skin differentiation and inflammation, suggesting that loss of iASPP in keratinocytes supports a tumor-promoting inflammatory microenvironment. Mechanistically, JNK-mediated phosphorylation regulates iASPP function and inhibits iASPP binding with AP1 components, such as JUND, via PXXP/SH3 domain-mediated interaction. Our results uncover a JNK-iASPP-AP1 regulatory axis that is crucial for tissue homeostasis. We show that iASPP is a tumor suppressor and an AP1 coregulator.