NGC 362 is a bright southern globular cluster for which no extensive variability survey has ever been done. Time-series CCD photometric observations have been obtained. Light curves have been derived with both profile fitting photometry and image subtraction. We developed a simple method to convert flux phase curves to magnitudes, which allows the use of empirical light curve shape vs. physical parameters calibrations. Using the RR Lyrae metallicity and luminosity calibrations, we have determined the relative iron abundances and absolute magnitudes of the stars. The color-magnitude diagram has been fitted with Yale-Yonsei isochrones to determine reddening and distance independently. For five RR Lyrae stars we obtained radial velocity measurements from optical spectra. We found 45 RR Lyr stars, of which the majority are new discoveries. About half of the RR Lyraes exhibit light curve changes (Blazhko effect). The RR Lyrae-based metallicity of the cluster is [Fe/H]=-1.16 +/- 0.25, the mean absolute magnitude of the RR Lyrae stars is M_V=0.82 +/- 0.04 mag implying a distance of 7.9 +/- 0.6 kpc. The mean period of RRab stars is 0.585 +/- 0.081 days. These properties place NGC 362 among the Oosterhoff type I globular clusters. The isochrone fit implies a slightly larger distance of 9.2 +/- 0.5 kpc and an age of 11 +/- 1 Gyr. We also found 11 eclipsing binaries, 14 pulsating stars of other types, including classical Cepheids in the SMC and 15 variable stars with no firm classification.
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