Skin exposure to UV rays from sunlight results in the formation of mutagenic DNA photolesions that are repaired by the nucleotide excision repair (NER) machinery. The inefficient repair of photolesions can lead to stalled DNA replication and mispairing, thereby causing strand breaks and mutations. B-cell translocation gene 3 (BTG3) is expressed in the epidermis of the skin and is an antiproliferative gene upregulated in human keratinocytes after radiation injury. In this study, we found that BTG3 is required to promote the timely extraction of the lesion-binding protein XPC by the segregase VCP/p97, an essential step preceding the excision of photolesions. Mechanistically, we showed that BTG3-dependent CHK1 activation and phosphorylation of VCP/p97 at S775 are necessary for the nuclear translocation of VCP/p97 after UV irradiation. Thus, loss of BTG3 or inhibition of CHK1 results in cytoplasmic retention of VCP/p97 and accumulation of ubiquitinated XPC, leading to delayed removal of photolesions and inefficient NER, which was recapitulated in vivo in the skin of the Btg3 knockout mice showing increased photolesions and γH2AX and elevated mutations after UV. Our findings revealed that by influencing the cellular localization of VCP/p97, BTG3 is critical for the proper execution of NER to protect cells from UV-induced damage and skin carcinogenesis.