Wild type p53 accumulates in the cytoplasm in a subset of tumors such as neuroblastomas and breast carcinomas through an unknown mechanism. Exclusion of p53 from the nucleus may lead to inactivation of p53 during tumor development. We present evidence that MDM2 plays a significant role in promoting the degradation of nuclear p53 in tumor cells with a cytoplasmic p53 phenotype. Inhibition of MDM2 expression using antisense oligonucleotide, inhibition of MDM2 function by the tumor suppressor ARF or a MDM2 deletion mutant result in the accumulation of nuclear p53. p53 point mutants deficient in MDM2 binding have increased nuclear localization. Inhibition of nuclear export by leptomycin B also results in retention of nascent p53 in the nucleus, suggesting that cytoplasmic distribution of p53 results from efficient export of nuclear p53 in combination with MDM2-mediated degradation. These results suggest that MDM2 is an important determinant of p53 subcellular distribution and may contribute to p53 inactivation without overexpression.