Giant cell tumours of bone (GCT) are characterized histologically by multinucleated bone resorbing giant cells in a background of ovoid spindle-shaped mesenchymal cells. Current evidence suggests that the latter comprise the tumour element of these lesions, although there are basic questions as to the factors that contribute to the tumourigenesis and progression of GCT. The deregulation of the p53/MDM2 pathway is an important pathogenetic event in many tumour types, prompting us to assess the expression of MDM2 by the stromal cells and giant cells of GCT. Northern blot analysis demonstrated that most of the GCT samples examined expressed increased levels of MDM2 when compared to normal human bone cells. However, Southern analysis failed to show any evidence of MDM2 gene amplification in the same samples, suggesting that increased levels of MDM2 mRNA were not a direct result of gene amplification, but rather due to altered transcriptional regulation of MDM2 gene. By RT-PCR analysis we found that 7/8 giant cell tumours expressed strongly a short alternatively spliced variant of MDM2, whereas other tumours of bone and normal human bone cells expressed predominantly full length MDM2. Sequence analysis confirmed this variant to be MDM2-b, a variant previously reported to confer a transformed phenotype. Cell fractionation of the GCTs has shown that the MDM2-b splice variant was expressed exclusively in the stromal population, whereas the full length MDM2 was expressed in the multinucleated giant cells of these lesions. Overexpression of a green fluorescent protein-tagged MDM2-b in human embryonic kidney cells (HEK-293), demonstrated predominantly nuclear localisation. Immunoprecipitation studies showed that MDM2-b is unable to physically associate with the p53 tumour suppressor protein. These results are consistent with the hypothesis that the stromal cells comprise the tumour element in giant cell tumours of bone and we speculate that expression of the MDM2-b splice variant contributes to their transformed phenotype in a p53 independent manner.