p21 Cip1/WAF1 inhibits cell‐cycle progression by binding to G 1 cyclin/CDK complexes and proliferating cell nuclear antigen (PCNA) through its N‐and C‐terminal domains, respectively. The cell‐cycle inhibitory activity of p21 Cip1/WAF1 is correlated with its nuclear localization. Here, we report a novel cytoplasmic localization of p21 Cip1/WAF1 in peripheral blood monocytes (PBMs) and in U937 cells undergoing monocytic differentiation by in vitro treatment with vitamin D3 or ectopic expression of p21 Cip1/WAF1, and analyze the biological consequences of this cytoplasmic expression. U937 cells which exhibit nuclear p21 Cip1/WAF1 demonstrated G 1 cell‐cycle arrest and subsequently differentiated into monocytes. The latter event was associated with a cytoplasmic expression of nuclear p21 Cip1/WAF1, concomitantly with a resistance to various apoptogenic stimuli. Biochemical analysis showed that cytoplasmic p21 Cip1/WAF1 forms a complex with the apoptosis signal‐regulating kinase 1 (ASK1) and inhibits stress‐activated MAP kinase cascade. Expression of a deletion mutant of p21 Cip1/WAF1 lacking the nuclear localization signal (ΔNLS‐p21) did not induce cell cycle arrest nor monocytic differentiation, but led to an apoptosis‐resistant phenotype, mediated by binding to and inhibition of the stress‐activated ASK1 activity. Thus, cytoplasmic p21 Cip1/WAF1 itself acted as an inhibitor of apoptosis. Our findings highlight the different functional roles of p21 Cip1/WAF1, which are determined by its intracellular distribution and are dependent on the stage of differentiation.