MDMX, an MDM2-related protein, has emerged as yet another essential negative regulator of p53 tumor suppressor, since loss of MDMX expression results in p53-dependent embryonic lethality in mice. However, it remains unknown why neither homologue can compensate for the loss of the other. In addition, results of biochemical studies have suggested that MDMX inhibits MDM2-mediated p53 degradation, thus contradicting its role as defined in gene knockout experiments. Using cells deficient in either MDM2 or MDMX, we demonstrated that these two p53 inhibitors are in fact functionally dependent on each other. In the absence of MDMX, MDM2 is largely ineffective in down-regulating p53 because of its extremely short half-life. MDMX renders MDM2 protein sufficiently stable to function at its full potential for p53 degradation. On the other hand, MDMX, which is a cytoplasmic protein, depends on MDM2 to redistribute into the nucleus and be able to inactivate p53. We also showed that MDMX, when exceedingly overexpressed, inhibits MDM2-mediated p53 degradation by competing with MDM2 for p53 binding. Our findings therefore provide a molecular basis for the nonoverlapping activities of these two p53 inhibitors previously revealed in genetic studies.