Cancer prevention is a cost-effective alternative to treatment. In mice, the mTOR inhibitor rapamycin prevents distinct spontaneous, noninflammatory cancers, making it a candidate broad-spectrum cancer prevention agent. We now show that oral microencapsulated rapamycin (eRapa) prevents skin cancer in dimethylbenz(a)anthracene (DMBA)/12-O-tetradecanoylphorbol-13-acetate (TPA) carcinogen-induced, inflammation-driven carcinogenesis. eRapa given before DMBA/TPA exposure significantly increased tumor latency, reduced papilloma prevalence and numbers, and completely inhibited malignant degeneration into squamous cell carcinoma. Rapamycin is primarily an mTORC1-specific inhibitor, but eRapa did not reduce mTORC1 signaling in skin or papillomas, and did not reduce important proinflammatory factors in this model, including p-Stat3, IL17A, IL23, IL12, IL1β, IL6, or TNFα. In support of lack of mTORC1 inhibition, eRapa did not reduce numbers or proliferation of CD45⁻CD34⁺CD49f^mid skin cancer initiating stem cells in vivo and marginally reduced epidermal hyperplasia. Interestingly, eRapa reduced DMBA/TPA-induced skin DNA damage and the hras codon 61 mutation that specifically drives carcinogenesis in this model, suggesting reduction of DNA damage as a cancer prevention mechanism. In support, cancer prevention and DNA damage reduction effects were lost when eRapa was given after DMBA-induced DNA damage in vivo. eRapa afforded picomolar concentrations of rapamycin in skin of DMBA/TPA-exposed mice, concentrations that also reduced DMBA-induced DNA damage in mouse and human fibroblasts in vitro. Thus, we have identified DNA damage reduction as a novel mechanism by which rapamycin can prevent cancer, which could lay the foundation for its use as a cancer prevention agent in selected human populations. Cancer Prev Res; 8(5); 400–9. ©2015 AACR.