In normal cells p53 activity is tightly controlled and MDM2 is a known negative regulator. Here we show that via its acidic domain, Daxx binds to the COOH-terminal domain of p53, whose positive charges are critical for this interaction, as Lys to Arg mutations preserved, but Lys to Ala or Ser to Glu mutations abolished Daxx-p53 interaction. These results thus implicate acetylation and phosphorylation of p53 in regulating its binding to Daxx. Interestingly, whereas Daxx did not bind to p53 in cells as assessed by immunoprecipitation, MDM2 expression restored p53-Daxx interaction, and this correlated with deacetylation of p53. In p53/MDM2-null mouse embryonic fibroblasts (DKO MEF), Daxx repressed p53 target promoters whose p53-binding elements were required for the repression. Coexpression of Daxx and MDM2 led to further repression. p53 expression in DKO MEF induced apoptosis and Daxx expression relieved this effect. Similarly, in HCT116 cells, Daxx conferred striking resistance to 5-fluorouracil-induced apoptosis. As p53 is required for 5-fluorouracil-induced cell death, our data show that Daxx can suppress cell death induced by p53 overexpression and p53-dependent stress response. Collectively, our data reveal Daxx as a novel negative regulator of p53. Importantly, posttranslational modifications of p53 inhibit Daxx-p53 interaction, thereby relieving negative regulation of p53 by Daxx.The critical role of p53 in tumor suppression is manifested in frequent mutations of the p53 gene in cancers (ϳ50% of all human cancers) and in its inactivation in many other cancers by cellular or viral oncogenes and other epigenetic alterations (1). p53-deficient mice develop normally, although such mice exhibit higher incidence of tumors than their wild-type counterparts, demonstrating a critical role for p53 in suppressing tumors (2). p53 exerts its tumor suppression function by activating expression of genes involved in growth arrest and apoptosis (3, 4), and it can also induce apoptosis directly by binding to Bcl-2 family proteins and triggering cytochrome c release (5). Inducing growth arrest and cell death by p53 can impact negatively on normal cell growth and organismal development. Indeed, deletion of the mdm2 gene, whose product is a negative regulator of p53, results in embryonic lethality, but deletion of both p53 and mdm2 simultaneously completely rescues such lethal phenotype (6, 7). Thus, p53 activity must be tightly controlled under physiological conditions. In addition to MDM2, numerous cellular and viral proteins interact with p53 and these proteins can positively or negatively modulate p53-mediated biological effects. Recently, we and others demonstrated that the transcriptional corepressor Daxx interacts with p53 (8 -10), but the biological significance of this interaction remains to be explored.Daxx was initially identified as a binding protein of Fas death domain and was shown to potentiate Fas-mediated apoptosis (11). Subsequent studies implicate Daxx in promoting apoptosis in diverse stress conditions (12-1...