Hemizygous deletion of 17p13, which harbors the TP53 gene, has been identified in >10% of newly diagnosed multiple myeloma (MM) patients and is associated with poor prognosis. To date, there is no conclusive evidence that TP53 is the critical gene. Furthermore, the functional effect of TP53 haploinsufficiency is not well characterized. By utilizing human myeloma cell lines, we showed that TP53 hemizygous loss was associated with decreased basal expression level with a partially or severely inactivated p53 response upon genotoxic and non-genotoxic stress. The pathway deficiency was manifested as defective p53 transcriptional activities, together with significant resistance to apoptosis. In some cases with p53 WT/- and no p53 protein expression, the remaining allele was silenced by promoter hypermethylation. We also developed a p53 target gene signature to summarize the complexity of the p53 pathway abnormalities in MM and showed that it is strongly associated with genomic complexity and patient survival. In conclusion, this study identified TP53 as the critical gene located in 17p13, and revealed its haploinsufficiency properties in MM. Furthermore, we have elucidated that multiple mechanisms can deregulate the p53 functions and that this has important prognostic impact in MM.