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BACKGROUND: Mdm-2, a zinc finger protein, negatively regulates the p53 tumor suppressor gene product by binding to it and preventing transcriptional activation (16). MATERIALS AND METHODS: Assays for p53 mediated transcription, repression and activation by mutant and wild-type p53 proteins were used to measure the ability of mdm-2 to block each activity. RESULTS: Mdm-2 was able to inhibit all three functions of the wild-type and mutant p53 activities; transcriptional activation by the wild-type protein, transcriptional activation by the mutant p53 protein, and repression by the wild-type protein. CONCLUSIONS: The mdm protein binds to the amino terminal portion of the p53 protein and, in so doing, blocks the ability of p53 to interact with the transcriptional machinery of the cell (23). The mdm-2 protein binds to both leucine-tryptophan residues at amino acids 22 and 23, from the amino terminal end of the protein, and in so doing, prevents all p53 functions. The ability of a mutant p53 protein to transactivate a multidrug resistance-1 gene promoter is blocked by mdm-2 and the ability of the wild-type p53 protein to repress transcription of some genes is also blocked by the mdm-2 protein. Thus, all three functions of the p53 protein-transcriptional activation, repression and mutant protein activation-require the p53 amino terminal domain functions and are regulated by the mdm-2 protein in a cell. When mdm-2 is overproduced, resulting in a tumor or transformation of a cell, all of the p53 activities are inactivated.