Activating transcription factor 3 (ATF3) is a common stress sensor, and its rapid induction by cellular stresses (e.g. DNA damage) is crucial for cells to mount appropriate responses (e.g. activating the tumor suppressor p53) and maintain homeostasis. Although emerging evidence suggests that dysregulation of ATF3 contributes to occurrences of human diseases including cancer, the mechanism(s) by which ATF3 expression is regulated is largely unknown. Here, we demonstrate that mouse double minute 2 (MDM2) is a bona fide E3 ubiquitin ligase for ATF3 and regulates ATF3 expression by promoting its degradation. MDM2 via its C-terminal RING finger can bind to the Basic region of ATF3 and mediate the addition of ubiquitin moieties to the ATF3 leucine zipper domain. As a consequence, ATF3, but not a mutant deficient in MDM2 binding (Delta80-100), is degraded by MDM2-mediated proteolysis. Consistent with these results, ablation of MDM2 in cells not only increases basal ATF3 levels, but results in stabilization of ATF3 in late stages of DNA damage responses. Because ATF3 was recently identified as a p53 activator, these results suggest that MDM2 could inactivate p53 through an additional feedback mechanism involving ATF3. Therefore, we provide the first evidence demonstrating that ATF3 is regulated by a posttranslational mechanism.