Serum and glucocorticoid regulated kinase 1 (Sgk1) is a serine-threonine kinase that is activated by serum, steroids, insulin, vasopressin, and interleukin 2 at the transcriptional and post-translational levels. Sgk1 is also important in transduction of growth factors and steroid-dependent survival signals and may have a role in the development of resistance to cancer chemotherapy. In the present paper, we demonstrate that Sgk1 activates MDM2-dependent p53 ubiquitylation. The results were obtained in RKO cells and other cell lines by Sgk1-specific RNA silencing and were corroborated in an original mouse model as well as in transiently and in stably transfected HeLa cells expressing wild-type or dominant negative Sgk1 mutant. Sgk1 contributes to cell survival, cell-cycle progression, and epithelial de-differentiation. We also show that the effects of Sgk1 on the clonogenic potential of different cancer cells depend on the expression of wild-type p53. Since transcription of Sgk1 is activated by p53, we propose a finely tuned feedback model where Sgk1 down-regulates the expression of p53 by enhancing its mono- and polyubiquitylation.