MDM2 and MDMX are the chief negative regulators of the tumor-suppressor protein p53 and are essential for maintaining homeostasis within the cell. In response to genotoxic stress and also in several cancer types, MDM2 and MDMX are alternatively spliced. The splice variants MDM2-ALT1 and MDMX-ALT2 lack the p53-binding domain and are incapable of negatively regulating p53. However, they retain the RING domain that facilitates dimerization of the full-length MDM proteins. Concordantly, MDM2-ALT1 has been shown to lead to the stabilization of p53 through its interaction with and inactivation of full-length MDM2. The impact of MDM2-ALT1 expression on the p53 pathway and the nature of its interaction with MDMX remain unclear. Also, the role of the architecturally similar MDMX-ALT2 and its influence of the MDM2-MDMX-p53 axis are yet to be elucidated. We show here that MDM2-ALT1 is capable of binding full-length MDMX as well as full-length MDM2. Additionally, we demonstrate that MDMX-ALT2 is able to dimerize with both full-length MDMX and MDM2 and that the expression of MDM2-ALT1 and MDMX-ALT2 leads to the upregulation of p53 protein, and also of its downstream target p21. Moreover, MDM2-ALT1 expression causes cell cycle arrest in the G1 phase in a p53 and p21 dependent manner, which is consistent with the increased levels of p21. Finally we present evidence that MDM2-ALT1 and MDMX-ALT2 expression can activate subtly distinct subsets of p53-transcriptional targets implying that these splice variants can modulate the p53 tumor suppressor pathway in unique ways. In summary, our study shows that the stress-inducible alternative splice forms MDM2-ALT1 and MDMX-ALT2 are important modifiers of the p53 pathway and present a potential mechanism to tailor the p53-mediated cellular stress response.