The p53 gene is compromised in most human cancers by point mutation. Evidence is accumulating that these alterations frequently do not result in a complete loss of the sequence-specific transcriptional regulatory function of p53. Here, we describe the transcriptional activity of the p53 mutant C277Y isolated from a Ewing's sarcoma with high constitutive pig3 expression. Transient transfection of this mutant into a p53 null cell line resulted in activation not only of the pig3 but also of the MDM2 gene compatible with the presence of constitutively expressed MDM2 transcripts initiated from the P2 promoter in the p53-C277Y hemizygous Ewing's sarcoma cell line. Expression of endogenous pig3 and MDM2 genes was further enhanced on irradiation of this cell line. Here, suppression of p53-C277Y by RNAi reduced pig3 promoter activity, RNA, and protein expression. Reporter gene assays revealed that the potential of p53-C277Y to up-regulate MDM2 expression was similar to wild-type p53, whereas activation of the pig3 promoter was at least 5-fold increased over wild-type p53. The pentanucleotide microsatellite sequence present in exon 1 of the pig3 gene was found to be responsible for p53-C277Y-mediated activation. In concordance with a role of PIG3 protein for cell death, we showed residual apoptotic activity of p53-C277Y to which the described Ewing's sarcoma cell line was found to be resistant. p53-C277Y has previously been reported to bind to DNA with altered sequence specificity and to be unable to activate generic p53 target genes in yeast-based functional assays. Our results, therefore, show that a p53 mutant may behave differently when tested in its authentic cellular context.