THE MDM2 proto-oncogene is found amplified in a variety of tumours(1). The oncogenic capacity of the MDM2 protein is attributed to its ability to bind the p53 tumour-suppressor protein and mask its transcriptional activation potential(2,3). Here we show that MDM2 makes a functional contact with two cooperating transcription factors, E2F1 and DP1 (refs 4, 5), which are involved in S-phase progression(6). MDM2 contacts the activation domain of E2F1 using residues conserved in the activation domain of p53. However, in contrast to its repression of p53 activity, MDM2 stimulates the activation capacity of E2F1/DP1. These results indicate that MDM2 not only releases a proliferative block by silencing the tumour suppressor p53, it also positively augments proliferation by stimulating the S-phase inducing transcription factors E2F1/DP1.