The activity of the tumor suppressor p53 is tightly controlled by its main negative regulator, Mdm2, which inhibits p53's transcriptional activity and targets it for degradation via the proteasome pathway. The closely related Mdm2 homolog, MdmX, is also considered to be a general inhibitor of transactivation by p53, through binding to the p53 activation domain. We show here that, unexpectedly, upon DNA damage and ribosomal stress, MdmX plays a positive role in p53-mediated activation of the Mdm2 gene, but not of numerous other p53 target genes including p21. Downregulation of MdmX results in lower levels of mature and nascent Mdm2 transcripts following cellular stress. This correlates with a longer p53 half-life following DNA damage. In vitro, Mdm2 inhibits the binding of p53 to DNA to a much greater extent than does MdmX, although MdmX does not stimulate p53 interaction with Mdm2 promoter DNA. Strikingly, however, MdmX is required for optimal p53 binding to the Mdm2 promoter in vivo. Thus, we have described a new mechanism by which MdmX can suppress p53, which is through transcriptional activation of p53's principal negative regulator, Mdm2.