Mus81 plays an integral role in the maintenance of genome stability and DNA repair in mammalian cells. Deficiency of Mus81 in human and mouse cells results in hypersensitivity to interstrand cross-linking (ICL) agents and elevated levels of genomic instability. Furthermore, Mus81-mutant mice are susceptible to spontaneous lymphomas. The role of cellular checkpoints in mediating the phenotypes observed in Mus81-deficient cells and mice is currently unknown. In this study, we have observed increased activation of p53 in Mus81(-/-) cells in response to ICL-induced DNA damage. In addition, p53 inactivation completely rescued the ICL hypersensitivity of Mus81(-/-) cells, signifying p53 is essential for the elimination of ICL-damaged cells in the absence of Mus81. Confirming that p53 acts as a critical checkpoint for the Mus81 repair pathway, a synergistic increase of spontaneous and ICL-induced genomic instability was observed in Mus81(-/-)p53(-/-) cells. To clarify the genetic interactions of Mus81 and p53 in tumor suppression, we monitored Mus81(-/-)p53(-/-) and control mice for the development of spontaneous tumors. Significantly, we show that loss of even a single allele of Mus81 drastically modifies the tumor spectrum of p53-mutant mice and increases their predisposition to developing sarcomas. Our results reveal a key role for p53 in mediating the response to spontaneous and ICL-induced DNA damage that occurs in the absence of Mus81. Furthermore, our data show that loss of Mus81, in addition to p53, is a key step in sarcoma development.