Circular RNAs are a class of non-coding RNAs that are receiving extensive attention. Despite reports showing circular RNAs acting as microRNA sponges, the biological functions of circular RNAs remain largely unknown. We show that in patient tumor samples and in a panel of cancer cells, circ-Foxo3 was minimally expressed. Interestingly, during cancer cell apoptosis, the expression of circ-Foxo3 was found to be significantly increased. We found that silencing endogenous circ-Foxo3 enhanced cell viability, whereas ectopic expression of circ-Foxo3 triggered stress-induced apoptosis and inhibited the growth of tumor xenografts. Also, expression of circ-Foxo3 increased Foxo3 protein levels but repressed p53 levels. By binding to both, circ-Foxo3 promoted MDM2-induced p53 ubiquitination and subsequent degradation, resulting in an overall decrease of p53. With low binding affinity to Foxo3 protein, circ-Foxo3 prevented MDM2 from inducing Foxo3 ubiquitination and degradation, resulting in increased levels of Foxo3 protein. As a result, cell apoptosis was induced by upregulation of the Foxo3 downstream target PUMA.