The tumor suppressor p53 has evolved a MDM2-dependent feedback loop that promotes p53 protein degradation through the ubiquitin-proteasome system. MDM2 is an E3-RING containing ubiquitin ligase that catalyzes p53 ubiquitination by a dual-site mechanism requiring ligand occupation of its N-terminal hydrophobic pocket, which then stabilizes MDM2 binding to the ubiquitination signal in the DNA-binding domain of p53. A unique pseudo-substrate motif or "lid" in MDM2 is adjacent to its N-terminal hydrophobic pocket, and we have evaluated the effects of the flexible lid on the dual-site ubiquitination reaction mechanism catalyzed by MDM2. Deletion of this pseudo-substrate motif promotes MDM2 protein thermoinstability, indicating that the site can function as a positive regulatory element. Phospho-mimetic mutation in the pseudo-substrate motif at codon 17 (MDM2(S17D)) stabilizes the binding of MDM2 towards two distinct peptide docking sites within the p53 tetramer and enhances p53 ubiquitination. Molecular modeling orientates the phospho-mimetic pseudo-substrate motif in equilibrium over a charged surface patch on the MDM2 at Arg(97)/Lys(98), and mutation of these residues to the MDM4 equivalent reverses the activating effect of the phospho-mimetic mutation on MDM2 function. These data highlight the ability of the pseudo-substrate motif to regulate the allosteric interaction between the N-terminal hydrophobic pocket of MDM2 and its central acidic domain, which stimulates the E3 ubiquitin ligase function of MDM2. This model of MDM2 regulation implicates an as yet undefined lid-kinase as a component of pro-oncogenic pathways that stimulate the E3 ubiquitin ligase function of MDM2 in cells.