The p53 family is known as a family of transcription factors with functions in tumor suppression and development. Whereas the central DNA-binding domain is highly conserved among the three family members p53, p63 and p73, the C-terminal domains (CTDs) are diverse and subject to alternative splicing and post-translational modification. Here we demonstrate that the CTDs strongly influence DNA binding and transcriptional activity: while p53 and the p73 isoform p73gamma have basic CTDs and form weak sequence-specific protein-DNA complexes, the major p73 isoforms have neutral CTDs and bind DNA strongly. A basic CTD has been previously shown to enable sliding along the DNA backbone and to facilitate the search for binding sites in the complex genome. Our experiments, however, reveal that a basic CTD also reduces protein-DNA complex stability, intranuclear mobility, promoter occupancy in vivo, target gene activation and induction of cell cycle arrest or apoptosis. A basic CTD therefore provides both positive and negative regulatory functions presumably to enable rapid switching of protein activity in response to stress. The different DNA-binding characteristics of the p53 family members could therefore reflect their predominant role in the cellular stress response (p53) or developmental processes (p73).