MDM2 is an oncoprotein best characterized for its role in the inactivation and degradation of the p53 tumor suppressor. However, MDM2 has many other binding partners and its p53-independent role in the regulation of cell growth and survival appears to be extremely complex. This report describes the expression of MDM2 in two rhabdomyosarcoma cell lines, both expressing a mutant p53 gene. Expression of MDM2 in Rh30 cells enhanced cell growth whereas expression of MDM2 in RD cells suppressed their growth and enhanced the rate of spontaneous apoptosis. The mechanism for these opposite phenotypes was demonstrated to be due to differential effects on the NFkappaB pathway. Previously MDM2 has been shown to activate NFkappaB through activation of transcription of the p65RelA subunit. In Rh30 cells MDM2 acted similarly to previously described, thereby promoting growth of Rh30 cells. In untreated RD cells p65RelA was constitutively overexpressed resulting in activation of the NFkappaB pathway. Expression of MDM2 in RD cells transcriptionally repressed p65RelA and suppressed NFkappaB activity, resulting in a reduced growth rate and enhanced apoptosis. The MDM2-sensitive region of the p65 promoter was localized to a 225 bp fragment to which MDM2 protein was shown to bind. The observation that MDM2 induces apoptosis under certain circumstances may help to explain the apparently surprising clinical studies that have shown that MDM2 expression in tumors is often associated with a favorable prognosis.