The tumor-suppressor protein p53 is tightly controlled in normal cells by its two negative regulators—the E3 ubiquitin ligase MDM2 and its homolog MDMX. Under stressed conditions such as DNA damage, p53 escapes MDM2- and MDMX-mediated functional inhibition and degradation, acting to prevent damaged cells from proliferating through induction of cell cycle arrest, DNA repair, senescence or apoptosis. Ample evidence suggests that stress signals induce phosphorylation of MDM2 and MDMX, leading to p53 activation. However, the structural basis of stress-induced p53 activation remains poorly understood because of the paucity of technical means to produce site-specifically phosphorylated MDM2 and MDMX proteins for biochemical and biophysical studies. Herein, we report total chemical synthesis, via native chemical ligation, and functional characterization of (24–108) MDMX and its Tyr99-phosphorylated analog with respect to their ability to interact with a panel of p53-derived peptide ligands and PMI, a p53-mimicking but more potent peptide antagonist of MDMX, using FP and surface plasmon resonance techniques. Phosphorylation of MDMX at Tyr99 weakens peptide binding by approximately two orders of magnitude. Comparative X-ray crystallographic analyses of MDMX and of pTyr99 MDMX in complex with PMI as well as modeling studies reveal that the phosphate group of pTyr99 imposes extensive steric clashes with the C-terminus of PMI or p53 peptide and induces a significant lateral shift of the peptide ligand, contributing to the dramatic decrease in the binding affinity of MDMX for p53. Because DNA damage activates c-Abl tyrosine kinase that phosphorylates MDMX at Tyr99, our findings afford a rare glimpse at the structural level of how stress-induced MDMX phosphorylation dislodges p53 from the inhibitory complex and activates it in response to DNA damage.