Lung adenocarcinoma (LUAD) was the predominant histological subtype of lung cancer, with poor prognosis. By analyzing the TCGA dataset, we found that DMBX1 (diencephalon/mesencephalon homeobox 1), a member of the bicoid sub-family of homeodomain-containing transcription factors, was overexpressed in LUAD and correlated with poorer prognosis and more advanced clinicopathological features of LUAD patients. Silencing of DMBX1 inhibited proliferation of LUAD and induced G1/S cell cycle arrest, whereas ectopic expression of DMBX1 enhanced tumor growth of LUAD and promoted G1/S cell cycle exit. Furtherly we found that the function of DMBX1 was dependent on p21 (CDKN1A), a key regulator of G1/S cell cycle progression. Co-IP assay revealed that DMBX1 directly bound to another homeobox transcription factor, OTX2. ChIP and luciferase reporter assay confirmed that OTX2 directly interacted with the promoter region of p21 to enhance its transcription, and DMBX1 repressed OTX2-mediated transcription of p21. Our study reveals that DMBX1 plays an oncogenic role in LUAD by repressing OTX2-mediated transcription of p21 and the results may provide new therapeutic targets for LUAD patients.