p53, the most commonly mutated tumor suppressor gene in human cancers, is a master regulator of apoptosis in many types of cells. Recently, protein phosphatase-1 (PP1) has emerged as a key phosphatase of p53, which modulates the interaction of p53 with its regulatory protein mouse double minute 2 (MDM2) and transcriptional activity. In the present study, we demonstrate the potential role of PP1 nuclear targeting subunit (PNUTS) in regulating the phosphorylation and apoptotic activities of p53. Hypoxia significantly increased mRNA and protein expression of PNUTS in various cell lines concomitantly with increases in p53. Promoter analysis confirmed the presence of hypoxia response elements in the promoter region of the PNUTS gene, which respond to hypoxia and forced expression of hypoxia-inducible factor 1 alpha. Overexpression of PNUTS markedly increased cell death in response to hypoxia, with increased expression of Bax, an apoptosis-related gene induced by p53. Consistently, PNUTS increased the nuclear localization, phosphorylation, and transcriptional activity of p53 as well as the ubiquitin-dependent proteosomal degradation of MDM2. However, the W401A mutant form of PNUTS, which is incapable of binding to PP1, failed to induce these events. Taken together, our findings suggest that PNUTS may play an important role in controlling cell death in response to cellular stresses such as hypoxia through the post-translational modification of p53 and MDM2.