Activation of apoptosis is believed to be critical for the role of p53 as a tumor suppressor. Here, we report a new mouse strain carrying a human p53 transgene in the mouse p53-null background. Expression of human p53 in these mice was comparable with wild-type murine p53; however, transactivation, induction of apoptosis, and G(1)-S checkpoint, but not transrepression or regulation of a centrosomal checkpoint, were deregulated. Although multiple functions of p53 were abrogated, mice carrying the human p53 transgene did not show early onset of tumors as typically seen for p53-null mice. In contrast, human p53 in the p53-null background did not prevent accelerated tumor development after genotoxic or oncogenic stress. Such behavior of human p53 expressed at physiologic levels in transgenic cells could be explained by unexpectedly high binding with Mdm2. By using Nutlin-3a, an inhibitor of the interaction between Mdm2 and p53, we were able to partially reconstitute p53 transactivation and apoptosis in transgenic cells. Our findings indicate that the interaction between p53 and Mdm2 controls p53 transcriptional activity in homeostatic tissues and regulates DNA damage- and oncogene-induced, but not spontaneous, tumorigenesis.