The Mdm2 gene is amplified in approximately one-third of human sarcomas and overexpressed in a variety of other human cancers. Mdm2 functions as an oncoprotein, in part, by acting as a negative regulator of the p53 tumor suppressor protein. Multiple spliced forms of Mdm2 transcripts have been observed in human tumors; however, the contribution of these variant transcripts to tumorigenesis is unknown. In this report, we isolate alternative splice forms of Mdm2 transcripts from sarcomas that spontaneously arise in Mdm2-overexpressing mice, including Mdm2-b, the splice form most commonly observed in human cancers. Transduction of Mdm2-b into a variety of cell types reveals that Mdm2-b promotes p53-independent cell growth, inhibits apoptosis, and up-regulates the RelA subunit of NFkappaB. Furthermore, expression of Mdm2-b induces tumor formation in transgenic mice. These results identify a p53-independent role for Mdm2 and determine that an alternate spliced form of Mdm2 can contribute to formation of cancer via a p53-independent mechanism. These findings also provide a rationale for the poorer prognosis of those patients presenting with tumors harboring multiple Mdm2 transcripts.