Human anion exchanger 2 (AE2) is a plasma membrane protein that regulates intracellular pH and cell volume. AE2 contributes to transepithelial transport of chloride and bicarbonate in normal colon and other epithelial tissues. We now report that AE2 overexpression in colon cancer cells is correlated with expression of the nuclear proliferation marker, Ki67. Survival analysis of 24 patients with colon cancer in early stage or 33 patients with tubular adenocarcinoma demonstrated that expression of AE2 is correlated with poor prognosis. Cellular and molecular experiments indicated that AE2 expression promoted proliferation of colon cancer cells. In addition, we found that transcription factor EGR1 underlies AE2 upregulation and the AE2 sequester p16INK4a (P16) in the cytoplasm of colon cancer cells. Cytoplasmic P16 enhanced ERK phosphorylation and promoted proliferation of colon cancer cells. Gastrin inhibited proliferation of colon cancer cells by suppressing expression of EGR1 and AE2 and by blocking ERK phosphorylation. Taken together, our data describe a novel EGR1/AE2/P16/P-ERK signaling pathway in colon carcinogenesis, with implications for pathologic prognosis and for novel therapeutic approaches.