Parkin and DJ-1 are two multi-functional proteins linked to autosomal recessive early-onset Parkinson's disease (PD) that have been shown to functionally interact by as-yet-unknown mechanisms. We have delineated the mechanisms by which parkin controls DJ-1. Parkin modulates DJ-1 transcription and protein levels via a signaling cascade involving p53 and the endoplasmic reticulum (ER)-stress-induced active X-box-binding protein-1S (XBP-1S). Parkin triggers the transcriptional repression of p53 while p53 downregulates DJ-1 protein and mRNA expressions. We show that parkin-mediated control of DJ-1 is fully p53-dependent. Furthermore, we establish that p53 lowers the protein and mRNA levels of XBP-1S. Accordingly, we show that parkin ultimately upregulates XBP-1 levels. Subsequently, XBP-1S physically interacts with the DJ-1 promoter, thereby enhancing its promoter trans-activation, mRNA levels and protein expression. This data was corroborated by the examination of DJ-1 in both parkin- and p53-null mice brains. This transcriptional cascade is abolished by pathogenic parkin mutations and is independent of its ubiquitin-ligase activity. Our data establish a parkin-dependent ER-stress-associated modulation of DJ-1 and identifies p53 and XBP-1 as two major actors acting downstream of parkin in this signaling cascade in cells and in vivo. This work provides a mechanistic explanation for the increase in the unfolded protein response observed in PD pathology, i.e. that it is due to a defect in parkin-associated control of DJ-1.