PICT1 (also known as GLTSCR2) is considered a tumor suppressor because it stabilizes phosphatase and tensin homolog (PTEN), but individuals with oligodendrogliomas lacking chromosome 19q13, where PICT1 is located, have better prognoses than other oligodendroglioma patients. To clarify the function of PICT1, we generated Pict1-deficient mice and embryonic stem (ES) cells. Pict1 is a nucleolar protein essential for embryogenesis and ES cell survival. Even without DNA damage, Pict1 loss led to p53-dependent arrest of cell cycle phase G(1) and apoptosis. Pict1-deficient cells accumulated p53, owing to impaired Mdm2 function. Pict1 binds Rpl11, and Rpl11 is released from nucleoli in the absence of Pict1. In Pict1-deficient cells, increased binding of Rpl11 to Mdm2 blocks Mdm2-mediated ubiquitination of p53. In human cancer, individuals whose tumors express less PICT1 have better prognoses. When PICT1 is depleted in tumor cells with intact P53 signaling, the cells grow more slowly and accumulate P53. Thus, PICT1 is a potent regulator of the MDM2-P53 pathway and promotes tumor progression by retaining RPL11 in the nucleolus.