DNA damage leads to a halt in proliferation owing to apoptosis or senescence, which prevents transmission of DNA alterations. This cellular response depends on the tumor suppressor p53 and functions as a powerful barrier to tumor development. Adult stem cells are resistant to DNA damage-induced apoptosis or senescence, however, and how they execute this response and suppress tumorigenesis is unknown. We show that irradiation of hematopoietic and mammary stem cells up-regulates the cell cycle inhibitor p21, a known target of p53, which prevents p53 activation and inhibits p53 basal activity, impeding apoptosis and leading to cell cycle entry and symmetric self-renewing divisions. p21 also activates DNA repair, limiting DNA damage accumulation and self-renewal exhaustion. Stem cells with moderate DNA damage and diminished self-renewal persist after irradiation, however. These findings suggest that stem cells have evolved a unique, p21-dependent response to DNA damage that leads to their immediate expansion and limits their long-term survival.