Mdm4 (MdmX) is a p53-binding protein that shares structural similarities with Mdm2 and has been proposed to be a negative regulator of p53 function. Like Mdm2, the absence of Mdm4 has recently been found to induce embryonic lethality in mice that is rescued by p53 deletion. Mdm4-null embryos are reduced in size and die at mid-gestation, and Mdm4-deficient embryos and embryonic fibroblasts displayed reduced rates of cell proliferation. The p53-induced, cyclin-dependent kinase inhibitor p21 is strongly upregulated in Mdm4-null embryos and cells. Here, we report that deletion of p21 delays the mid-gestation lethality observed in Mdm4-null mice, suggesting that Mdm4 downregulates p53-mediated suppression of cell growth. Surprisingly, the absence of p21 also uncovers an antiproliferative effect of Mdm4 on cell growth in vitro and in Mdm4-heterozygous mice. These results indicate that p21 is a downstream modifier of Mdm4, and provides genetic evidence that Mdm4 can function to regulate cell growth both positively and negatively.