As a result of the toxicity of currently available anticancer drugs and the inefficiency of chemotherapeutic treatments, the design and discovery of effective and selective antitumor agents continues to be a hot topic in organic medicinal chemistry. Targeted therapy is a newer type of cancer treatment that uses drugs designed to interfere with specific molecules necessary for tumor growth and progression. This review explains the mechanism of regulation of p53 (tumor suppressor protein) by MDM2 and illustrates the role of targeting p53-MDM2 protein-protein interaction using small molecules as a new cancer therapeutic strategy. Spirocyclic oxindoles or spiro-oxindoles, with a rigid heterocyclic ring fused at the 3-position of the oxindole core with varied substitution around it, are the most efficacious class of small molecules which inhibit cell proliferation and induce apoptosis in cancer cells, leading to complete tumor growth regression without affecting activities of normal cells. In this review, we present a comprehensive account of the systematic development of and recent progress in diverse spiro-oxindole derivatives active as potent selective inhibitors of p53-MDM2 interaction with special emphasis on spiro-pyrrolidinyl oxindoles (the MI series), their mechanism of action, and structure-activity relationship. This review will help in understanding the molecular mechanism of p53 reactivation by spiro-oxindoles in tumor tissues and also facilitates the design and exploration of more potent analogues with high efficacy and low side effects for the treatment of cancer. Recent progress in spiro-oxindole derivatives as potent small molecule inhibitors of p53-MDM2 interaction, useful as anticancer agents, is described with reference to their mechanism of action and structure-activity relationship.