p97 (also referred to as DAP5, NAT1 or eIF4G2) has been proposed to act as a repressor of protein synthesis. However, we found that p97 is abundantly expressed in proliferating cells and p97 is recruited to ribosomes following growth factor stimulation. We also report that p97 binds eIF2beta through its C-terminal domain and localizes to ribosome through its N-terminal MIF4G domain. When overexpressed, p97 increases reporter luciferase activity. In contrast, overexpression of the C-terminal two-thirds of eukaryotic initiation factor 4GI (eIF4GI), a region that shares significant homology with p97, or the N-terminal MIF4G domain of p97 markedly inhibits reporter activity, the rate of global translation and cell proliferation. Conversely, downregulation of p97 levels by RNA interference also decreases the rate of global translation and inhibits cell proliferation. This coincides with an increase in p27/Kip1 protein levels and a marked decrease in CDK2 kinase activity. Taken together, our results demonstrate that p97 is functionally different from the closely related C-terminal two-thirds of eIF4GI and it can positively promote protein synthesis and cell proliferation.