The p73beta protein shares structural and functional similarities with the tumor suppressor gene product p53. Both proteins activate transcription from p53-responsive promoters. p53's activity is antagonized by the mdm2 protein (also termed hdm2 in human cells). Complex formation between p53 and mdm2 results in p53's transcriptional inactivation and destabilization. Here we show that overexpression of mdm2 reduces p73beta's ability to activate transcription, too. The mdm2 protein forms a specific complex with p73beta in vitro with an efficiency comparable to p53-binding. Further, both p73beta and p53 relocalize a transport-defective mutant of mdm2 from the cytoplasm to the nucleus, arguing that complex formation occurs in vivo as well. Mutational analysis suggests that the interaction between p73beta and mdm2 follows structural principles analogous to the p53-mdm2-complex. Whereas p53 is destabilized in the presence of mdm2, the amount of intracellular p73beta was not detectably reduced by mdm2. The carboxyterminal RING finger domain of mdm2 was found to be required to reduce the intracellular abundance of p53, but it was dispensable for transcriptionally inactivating either p53 or p73beta. Our results suggest that the autoregulatory feedback loop between p53 and mdm2 also controls p73's activity, but that mdm2-mediated protein degradation is unique to p53.