Human MDM2 (hMDM2) inhibits transcriptional activation mediated by wild-type p53 and its tumor-derived mutants. We present evidence to show that hMDM2 interacts with the tumor-derived mutants of p53 and inhibits transcriptional activation of the human c-myc promoter mediated by the tumor-derived mutants of p53 through two domains. These two domains of hMDM2 are able to function independent of each other. Interaction with either of the domains is sufficient for inhibition of mutant p53-mediated transactivation. One of these domains is the same as the wild-type p53 interaction domain of hMDM2, whereas a second domain is situated within amino acid 190 and 276 residues and is specific for mutant p53. hMDM2 does not inhibit transcriptional activation mediated by the transcriptional activator VP16, suggesting that the inhibition is not mediated by inactivation of a general transcription factor. The transactivation and the oligomerization domains of mutant p53 are dispensable for its interaction with hMDM2. Thus, both hMDM2 and p53 recognize each other through unique domains. These observations suggest that forms of hMDM2 incapable of interacting with the wild-type p53, and are often expressed in transformed cells, would inhibit mutant p53-mediated transactivation and antagonize the tumorigenic function of mutant p53. This inhibitory function of hMDM2 may account for infrequent co-occurrence of p53 mutation and hMDM2 overexpression in cancer cells. Our results also suggest distinct mechanisms for wild-type and mutant p53-mediated transcriptional activation.