Lung cancer is the leading cause of cancer-related deaths in the world. Achaete-scute complex homolog-1 (Ascl1) is a member of the basic helix-loop-helix (bHLH) transcription factor family that has multiple functions in the normal and neoplastic lung such as the regulation of neuroendocrine differentiation, prevention of apoptosis and promotion of tumor-initiating cells. We now show that Ascl1 directly regulates matrix metalloproteinase-7 (MMP-7) and O(6)-methylguanine-DNA methyltransferase (MGMT). Loss- and gain-of-function experiments in human bronchial epithelial and lung carcinoma cell lines revealed that Ascl1, MMP-7 and MGMT are able to protect cells from the tobacco-specific nitrosamine NNK-induced DNA damage and the alkylating agent cisplatin-induced apoptosis. We also examined the role of Ascl1 in NNK-induced lung tumorigenesis in vivo. Using transgenic mice which constitutively expressed human Ascl1 in airway lining cells, we found that there was a delay in lung tumorigenesis. We conclude that Ascl1 potentially enhances DNA repair through activation of MMP-7 and MGMT which may impact lung carcinogenesis and chemoresistance. The study has uncovered a novel and unexpected function of Ascl1 which will contribute to better understanding of lung carcinogenesis and the broad implications of transcription factors in tobacco-related carcinogenesis.