The tumor suppressor p53 regulates cell cycle progression and apoptosis in response to various types of stress, whereas excess p53 activity creates unwanted effects. Tight regulation of p53 is essential for maintaining normal cell growth. p53-associated cellular protein-testes derived (PACT, also known as P2P-R, RBBP6) is a 250-kDa Ring finger-containing protein that can directly bind to p53. PACT is highly up-regulated in esophageal cancer and may be a promising target for immunotherapy. However, the physiological role of the PACT-p53 interaction remains largely unclear. Here, we demonstrate that the disruption of PACT in mice leads to early embryonic lethality before embryonic day 7.5 (E7.5), accompanied by an accumulation of p53 and widespread apoptosis. p53-null mutation partially rescues the lethality phenotype and prolonged survival to E11.5. Endogenous PACT can interact with Hdm2 and enhance Hdm2-mediated ubiquitination and degradation of p53 as a result of the increase of the p53-Hdm2 affinity. Consequently, PACT represses p53-dependent gene transcription. Knockdown of PACT significantly attenuates the p53-Hdm2 interaction, reduces p53 polyubiquitination, and enhances p53 accumulation, leading to both apoptosis and cell growth retardation. Taken together, our data demonstrate that the PACT-p53 interaction plays a critical role in embryonic development and tumorigenesis and identify PACT as a member of negative regulators of p53.