CREB/ATF transcription factor OASIS/CREB3L1 is upregulated in long-term-cultured astrocytes undergoing cell-cycle arrest due to loss of DNA integrity by repeated replication. However, the roles of OASIS in the cell cycle remain unexplored. We find that OASIS arrests the cell cycle at G2/M phase after DNA damage via direct induction of p21. Cell-cycle arrest by OASIS is dominant in astrocytes and osteoblasts, but not in fibroblasts, which are dependent on p53. In a brain injury model, Oasis-/- reactive astrocytes surrounding the lesion core show sustained growth and inhibition of cell-cycle arrest, resulting in prolonged gliosis. We find that some glioma patients exhibit low expression of OASIS due to high methylation of its promoter. Specific removal of this hypermethylation in glioblastomas transplanted into nude mice by epigenomic engineering suppresses the tumorigenesis. These findings suggest OASIS as a critical cell-cycle inhibitor with potential to act as a tumor suppressor.