mdm2 encodes for an E3 ubiquitin ligase targeting constitutively expressed p53 for proteasomal degradation. Several protein isoforms have been described for human MDM2 (HDM2), some of which may correspond to splicing variants detectable by RT–PCR in many tumors. Upon cellular stress, p53 becomes resistant to MDM2 and, in a feedback loop, up-regulates mdm2 transcription. The physiological relevance of stress-induced mdm2 gene activity is not well understood. We describe a small nuclear RNA of 365 bases comprised of the first five hdm2 exons and lacking polyadenylation. hdm365 precedes full-length hdm2 RNA expression after induction by p53 and accumulates to significant levels in the nucleus, detectable at the site of hdm2 transcription and processing only. Considering a 10-fold lower stability and high steady-state levels of the novel RNA species, hdm365 appears to be the major processing product of hdm2 transcripts. hdm365 induction was observed after ectopic expression of p53 and after DNA damaging treatment of tumor cell lines, primary fibroblasts and lymphocytes, and was not related to apoptosis. Corresponding truncated transcripts were observed in hdm2 amplified cells. High stress-inducible expression levels, absence of a corresponding protein, and nuclear localisation of hdm365 suggest a novel RNA-based function for hdm2.