The p53 tumor suppressor gene plays a critical role in regulation of proliferation, cell death and differentiation. The MDM2 oncoprotein is a major negative regulator for p53 by binding to and targeting p53 for proteasome-mediated degradation. The small molecule inhibitor, nutlin-3, disrupts MDM2-p53 interaction resulting in stabilization and activation of p53 protein. We have previously shown that nutlin-3 activates p53, leading to MDM2 accumulation as concomitant of reduced retinoblastoma (Rb) protein stability. It is well known that Rb is important in muscle development and myoblast differentiation and that rhabdomyosarcoma (RMS), or cancer of the skeletal muscle, typically harbors MDM2 amplification. In this study, we show that nutlin-3 inhibited myoblast proliferation and effectively prevented myoblast differentiation, as evidenced by lack of expression of muscle differentiation markers including myogenin and myosin heavy chain (MyHC), as well as a failure to form multinucleated myotubes, which were associated with dramatic increases in MDM2 expression and decrease in Rb protein levels. These results indicate that nutlin-3 can effectively inhibit muscle cell differentiation.