Gemcitabine (2'-deoxy-2', 2'-difluorocytidine; Gem) is a nucleoside anti-metabolite and is commonly used for treating various human cancers including human bladder carcinoma. Gemcitabine not only functions as a suicide nucleoside analog but also inhibits DNA polymerase activity and results in the termination of chain elongation. Using 2-dimensional gel electrophoresis analysis, a Gem-induced protein was identified as UBE2M (a.k.a. UBC12), a NEDD8 conjugation E2 enzyme which contributes to protein degradation. Gem induced UBE2M expression at both RNA and protein levels in several human cancer cell lines. The induction of UBE2M by Gem was accompanied by a reduction in p27(Kip1) protein levels, which could be restored by silencing UBE2M expression with siRNA or by treating cells with the proteasome inhibitor MG132, indicating that UBE2M mediates Gem-induced p27(Kip1) protein degradation. The induction of UBE2M and reduction of p27(Kip1) by Gem were prevented by the PI3K inhibitor LY294002. These results indicate that PI3K activity is necessary for Gem-induced UBE2M expression and that UBE2M facilitates degradation of p27(Kip1). Notably, silencing of UBE2M expression reduced Gem sensitivity in NTUB1 cells, suggesting that UBE2M mediates in part cell sensitivity to Gem, possibly by degradation of p27(Kip1). Analysis of Gem-resistant sub lines also showed that loss of UBE2M and increased p27(Kip1) expression were associated with the acquisition of drug resistance. In conclusion, our results demonstrate a role for UBE2M in mediating cytotoxicity of gemcitabine in human urothelial carcinoma cells while also suggesting a potential function of p27(Kip1) in drug resistance.