The chaperone protein and guanine nucleotide exchange factor SmgGDS (RAP1GDS1) is a key promoter of cancer cell proliferation and tumorigenesis. SmgGDS undergoes nucleocytoplasmic shuttling, suggesting that it has both cytoplasmic and nuclear functions that promote cancer. Previous studies indicate that SmgGDS binds cytoplasmic small GTPases and promotes their trafficking to the plasma membrane. In contrast, little is known about the functions of SmgGDS in the nucleus, or how these nuclear functions might benefit cancer cells. Here we show unique nuclear localization and regulation of gene transcription pathways by SmgGDS. Strikingly, SmgGDS depletion significantly reduces expression of over 600 gene products that are targets of the DREAM complex, which is a transcription factor complex that regulates expression of proteins controlling the cell cycle. The cell cycle regulators E2F1, MYC, MYBL2 (B-Myb) and FOXM1 are among the DREAM targets that are diminished by SmgGDS depletion. E2F1 is well known to promote G1 cell cycle progression, and the loss of E2F1 in SmgGDS-depleted cells provides an explanation for previous reports that SmgGDS depletion characteristically causes a G1 cell cycle arrest. We show that SmgGDS localizes in nucleoli, and that RNAimediated depletion of SmgGDS in cancer cells disrupts nucleolar morphology, signifying nucleolar stress. We show that nucleolar SmgGDS interacts with the RNA polymerase I transcription factor upstream binding factor (UBF). The RNAi-mediated depletion of UBF diminishes nucleolar localization of SmgGDS and promotes proteasome-mediated degradation of SmgGDS, indicating that nucleolar sequestration of SmgGDS by UBF stabilizes SmgGDS protein. The ability of SmgGDS to interact with UBF and localize in the nucleolus is diminished by expressing DiRas1 or DiRas2, which are small GTPases that bind SmgGDS and act as tumor suppressors. Taken together, our results support a novel nuclear role for SmgGDS in protecting malignant cells from nucleolar stress, thus promoting cell cycle progression and tumorigenesis.