The gene Trp53 is among the most frequently mutated and studied genes in human cancer, but the mechanisms by which it suppresses tumour formation remain unclear. We generated mice with an allele encoding changes at Leu25 and Trp26, known to be essential for transcriptional transactivation and Mdm2 binding, to enable analyses of Trp53 structure and function in vivo. The mutant Trp53 was abundant, its level was not affected by DNA damage and it bound DNA constitutively; however, it showed defects in cell-cycle regulation and apoptosis. Both mutant and Trp53-null mouse embryonic fibroblasts (MEFs) were readily transformed by oncogenes, and the corresponding mice were prone to tumours. We conclude that the determining pathway for Trp53 tumour-suppressor function in mice requires the transactivation domain.