Regulation of the stability of p53 is key to its tumor-suppressing activities. mdm2 directly binds to the amino-terminal region of p53 and targets it for degradation through the ubiquitin-proteasome pathway. The coactivator protein TAF(II)31 binds to p53 at the amino-terminal region that is also required for interaction with mdm2. In this report, we demonstrate that expression of TAF(II)31 inhibits mdm2-mediated ubiquitination of p53 and increases p53 levels. TAF(II)31-mediated p53 stabilization results in activation of p53-mediated transcriptional activity and leads to p53-dependent growth arrest in fibroblasts. UV-induced stabilization of p53 coincides with an increase in p53-associated TAF(II)31 and a corresponding decrease in mdm2-p53 interaction. Non-p53 binding mutant of TAF(II)31 fails to stabilize p53. Our results suggest that direct interaction of TAF(II)31 and p53 not only mediates p53 transcriptional activation but also protects p53 from mdm2-mediated degradation, thereby resulting in activation of p53 functions.