Mdm-2 plays a central role in the regulation of p53 protein level and activity. Although the interaction of mdm-2 and p53 occurs through the N-terminus of the p53 protein, our present data suggest that the C' terminus plays an important role in the regulation of the p53/mdm-2 loop. Comparative analysis of the murine regularly spliced form of p53 (RSp53) and a physiological C-terminally modified p53 protein, which results from alternative splicing of the p53 mRNA (ASp53), indicated that the two isoforms behave differently in the p53/mdm-2 loop. We found that ASp53 can preferentially induce higher levels of the mdm-2 protein, compared with RSp53. Although the transactivation capacity of both forms is inhibited by mdm-2, only RSp53 is directed to proteolytic degradation by mdm-2, while ASp53 is relatively resistant. We present evidence that suggests that ASp53 protein levels determine the biological activities mediated by RSp53, such as the induction of apoptosis, through the mdm-2/p53 regulatory loop. We suggest, therefore, a new mechanism for the regulation of p53, and show that alteration of the p53 extreme C' terminus can significantly change the transcription activity and the resistance to degradation properties of the p53 protein.