Many of the roles played by the tumor suppressor p53 in restraining cancer initiation and progression are well established. These include the ability of p53 to induce cell-cycle arrest, DNA repair, senescence and apoptosis. In addition, during the 30 years of p53 research, numerous studies have implicated p53 in the regulation of differentiation and developmental pathways. Here, we summarize the data on these relatively less-characterized functions of p53, including its involvement in embryogenesis and various differentiation programs, as well as its function in restraining de-differentiation of mature somatic cells. Besides the well-known functions of p53 as a cell-cycle regulator and a mediator of apoptosis, both coincide with differentiation processes, p53 was shown to exert its effects on various differentiation programs via direct regulation of specific key factors controlling these programs. The complex regulation by p53, which acts to suppress or to induce differentiation, is mainly the result of the specific cell type and fate. We argue that regulation of differentiation is pivotal for the tumor-suppressive activity of p53, which act to maintain the proper cellular state, preventing improper maturation or reprogramming. This conclusion is further supporting the notion that aberrant differentiation is associated with malignant transformation.