The cellular response to p53 activation varies greatly in a stimulus- and cell type-specific manner. Dissecting the molecular mechanisms defining these cell fate choices will assist the development of effective p53-based cancer therapies and also illuminate fundamental processes by which gene networks control cellular behaviour. Using an experimental system wherein stimulus-specific p53 responses are elicited by non-genotoxic versus genotoxic agents, we discovered a novel mechanism that determines whether cells undergo proliferation arrest or cell death. Strikingly, we observe that key mediators of cell-cycle arrest (p21, 14-3-3σ) and apoptosis (PUMA, BAX) are equally activated regardless of outcome. In fact, arresting cells display strong translocation of PUMA and BAX to the mitochondria, yet fail to release cytochrome C or activate caspases. Surprisingly, the key differential events in apoptotic cells are p53-dependent activation of the DR4 death receptor pathway, caspase 8-mediated cleavage of BID, and BID-dependent activation of poised BAX at the mitochondria. These results reveal a previously unappreciated role for DR4 and the extrinsic apoptotic pathway in cell fate choice following p53 activation.