<p>SHP interacts physically with Mdm2 through lysine 170 to markedly increase Mdm2 protein stability. The increase in Mdm2 destabilizes p53, which in part explains SHP augmentation of Mdm2-mediated p53 ubiquitination. In turn, p53 downregulates SHP by targeting the protein for proteasomal degradation through an undefined mechanism (indicated by a question mark). Mdm2 also moderately decreases SHP, and its effect is strongly augmented by <i>p53</i>-deficiency, thus creating an autoregulatory loop with SHP. Our study reveals a fine tuned interplay among SHP, Mdm2 and p53, which provides new insight into the mechanisms of regulating p53 and Mdd2 stability mediated by a nuclear receptor.</p