We report here the characterization of a mutant mouse line with a specific gene trap event in the Mdm4 locus. Absence of Mdm4 expression results in embryonic lethality (10.5 days postcoitum [dpc]), which was rescued by transferring the Mdm4 mutation into a Trp53-null background. Mutant embryos were characterized by overall growth deficiency, anemia, improper neural tube closure, and dilation of lateral ventricles. In situ analysis demonstrated increased levels of p21^CIP1/Waf1 and lower levels of Cyclin E and proliferating cell nuclear antigen expression. Consistent with lack of 5-bromo-2′-deoxyuridine incorporation, these data suggest a block of mutant embryo cells in the G₁ phase of the cell cycle. Accordingly, Mdm4-deficient mouse embryonic fibroblasts manifested a greatly reduced proliferative capacity in culture. Moreover, extensive p53-dependent cell death was specifically detected in the developing central nervous system of the Mdm4 mutant embryos. These findings unambiguously assign a critical role for Mdm4 as a negative regulator of p53 and suggest that Mdm4 could contribute to neoplasias retaining wild-type Trp53. Finally, we provide evidence indicating that Mdm4 plays no role on cell proliferation or cell cycle control that is distinct from its ability to modulate p53 function.