We report that a p53 segment (p53 del 1-293) containing the oligomerization domain interferes with the functions of wild-type p53. Wild-type p53 inhibits transcription mediated by human cytomegalovirus (CMV) immediate-early promoter significantly; however, co-expression of p53 del 1-293 drastically reduces this repression. We show that wild-type p53 forms hetero-oligomers with p53 del 1-293 suggesting that the hetero-oligomers are defective in repressing the CMV promoter. A synthetic promoter with p53-binding sites is transactivated significantly by wild-type p53. However, co-expression of p53 del 1-293 drastically reduces this activation. At a high concentration, a deletion mutant of wild-type p53 (del 393-327) defective in oligomerization transactivates efficiently a promoter with synthetic p53-binding sites. This transactivation remains unaffected by co-expression of p53 del 1-293. p53 del 393-327 also fails to hetero-oligomerize with p53 del 1-293 indicating that hetero-oligomerization is necessary for disruption of wild-type p53-mediated transactivation. Immunostaining experiments show that hetero-oligomerization does not lead to changes in localization of nuclear p53 demonstrating that delocalization of p53 is not the reason for inactivation. We also show that co-expression of p53 del 1-293 significantly reduces the G1/S arrest by wild-type p53 suggesting that a proper oligomeric form is necessary for wild-type p53-mediated cell cycle arrest. Thus, our work shows that hetero-oligomerization disrupts wild-type p53's biological functions and suggests a mechanism by which <dominant negative> p53 mutants may disrupt functions of wild-type p53.