Inflammation-induced activation of proto-oncogenic NF-κB/REL and dysfunction of tumor suppressor TP53/p63/p73 family transcription factors are key events in cancer progression. How inflammatory signaling coordinates dysregulation of these two transcription factor families during oncogenesis remains incompletely understood. Here, we observed that oncoprotein c-REL and tumor suppressor TAp73 are coexpressed and complex with ΔNp63α in the nucleus of a subset of head and neck squamous cell carcinoma (HNSCC) cell lines with mutant (mt)TP53. TNF-α, a proinflammatory cytokine, promoted c-REL nuclear translocation, c-REL/ΔNp63α interaction, and dissociation of TAp73 from ΔNp63α and the nucleus to the cytoplasm, whereas c-REL siRNA knockdown attenuated this effect. Overexpression of c-REL or a c-REL κB-site DNA-binding mutant enhanced protein interaction with ΔNp63α and TAp73 dissociation, implicating c-REL/ΔNp63α-specific interactions in these effects. We discovered that TNF-α or genetic alteration of c-REL expression inversely modulates ΔNp63α/TAp73 interactions on distinct p63 DNA-binding sites, including those for key growth arrest and apoptotic genes p21WAF1, NOXA, and PUMA. Functionally, c-REL repressed these genes and the antiproliferative effects of TNF-α or TAp73. Conversely, c-REL siRNA depletion enhanced TAp73 promoter interaction and expression of genes mediating growth arrest and apoptosis. Similar to TNF-α-treated HNSCC lines, human HNSCC tumors and hyperplastic squamous epithelia of transgenic mice overexpressing ΔNp63α that exhibit inflammation also show increased nuclear c-REL/ΔNp63α and cytoplasmic TAp73 localization. These findings unveil a novel and reversible dynamic mechanism whereby proinflammatory cytokine TNF-α-induced c-REL/ΔNp63α interactions inactivate tumor suppressor TAp73 function, promoting TNF-α resistance and cell survival in cancers with mtTP53.