Upon DNA damage, p53 can induce either cell-cycle arrest or apoptosis. Here we show that monocytic leukemia zinc finger (MOZ) forms a complex with p53 to induce p21 expression and cell-cycle arrest. The levels of the p53-MOZ complex increased in response to DNA damage to levels that induce cell-cycle arrest. MOZ(-/-) mouse embryonic fibroblasts failed to arrest in G1 in response to DNA damage, and DNA damage-induced expression of p21 was impaired in MOZ(-/-) cells. These results suggest that MOZ is involved in regulating cell-cycle arrest in the G1 phase. Screening of tumor-associated p53 mutants demonstrated that the G279E mutation in p53 disrupts interactions between p53 and MOZ, but does not affect the DNA binding activity of p53. The leukemia-associated MOZ-CBP fusion protein inhibits p53-mediated transcription. These results suggest that inhibition of p53/MOZ-mediated transcription is involved in tumor pathogenesis and leukemogenesis.