The p53 tumor suppressor protein and the MDM2 oncoprotein form a feedback-control loop that up-regulates cellular MDM2 production, blocks p53 activity, and promotes p53 decay. tsg101 was discovered as a gene whose deficiency results in neoplastic transformation of NIH 3T3 cells and the ability to generate metastatic tumors in nude mice. Its protein product contains a domain, Ubc, characteristic of the catalytic domain of ubiquitin conjugase (E2) enzymes but lacking an active-site cysteine crucial for ubiquitin conjugase activity. Here we report that TSG101 participates with MDM2 in an autoregulatory loop that modulates the cellular levels of both proteins, and also of p53, by affecting protein decay. We show that the Ubc domain of TSG101 interferes with ubiquitination of MDM2, that TSG101 inhibits MDM2 decay and elevates its steady-state level, and that these events are associated with down-regulation of p53 protein. Conversely, pulse-chase and Western blot experiments in wild-type and mutant fibroblasts indicate that elevation of MDM2 by overexpression of wild-type p53, by amplification of the endogenous MDM2 gene, or by transfection of MDM2-expressing constructs promotes TSG101 loss, which we show occurs by 26S proteasome-dependent decay. Our results identify TSG101 as both a regulator of, and target of, MDM2/p53 circuitry.