Parafibromin is a tumor suppressor protein encoded by HRPT2, a gene recently implicated in the hereditary hyperparathyroidism-jaw tumor syndrome, parathyroid cancer, and a subset of kindreds with familial isolated hyperparathyroidism. Human parafibromin binds to RNA polymerase II as part of a PAF1 transcriptional regulatory complex. The physiologic targets of parafibromin and the mechanism by which its loss of function can lead to neoplastic transformation are poorly understood. We show here that RNA interference with the expression of parafibromin or Paf1 stimulates cell proliferation and increases levels of the c-myc proto-oncogene product, a DNA-binding protein and established regulator of cell growth. This effect results from both c-myc protein stabilization and activation of the c-myc promoter, without alleviation of the c-myc transcriptional pause. Chromatin immunoprecipitation demonstrates the occupancy of the c-myc promoter by parafibromin and other PAF1 complex subunits in native cells. Knockdown of c-myc blocks the proliferative effect of RNA interference with parafibromin or Paf1 expression. These experiments provide a previously uncharacterized mechanism for the anti-proliferative action of the parafibromin tumor suppressor protein resulting from PAF1 complex-mediated inhibition of the c-myc proto-oncogene.