Regulation of p53 involves a complex network of protein interactions. The primary regulator of p53 protein stability is the Mdm2 protein. ARF and MdmX are two proteins that have recently been shown to inhibit Mdm2-mediated degradation of p53 via distinct associations with Mdm2. We demonstrate here that ARF is capable of interacting with MdmX and in a manner similar to its association with Mdm2, sequestering MdmX within the nucleolus. The sequestration of MdmX by ARF results in an increase in p53 transactivation. In addition, the redistribution of MdmX by ARF requires that a nucleolar localization signal be present on MdmX. Although expression of either MdmX or ARF leads to Mdm2 stabilization, coexpression of both MdmX and ARF results in a decrease in Mdm2 protein levels. Similarly, increasing ARF protein levels in the presence of constant MdmX and Mdm2 leads to a dose-dependent decrease in Mdm2 levels. Under these conditions, ARF can synergistically reverse the ability of Mdm2 and MdmX to inhibit p53-dependent transactivation. Finally, the association and redistribution of MdmX by ARF has no effect on the protein stability of either ARF or MdmX. Taken together, these results demonstrate that the interaction between MdmX and ARF represents a novel pathway for regulating Mdm2 protein levels. Additionally, both MdmX and Mdm2, either individually or together, are capable of antagonizing the effects of the ARF tumor suppressor on p53 activity.