MDM2 is a ubiquitin ligase that is best known for its essential function in the negative regulation of p53. In addition, MDM2 expression is associated with tumor progression in a number of common cancers, and in some cases, this has been shown to be independent of p53 status. MDM2 has been shown to promote the degradation of a number of other proteins involved in the regulation of normal cell growth and proliferation, including MDM4 and RB1. Here, we describe the identification of a novel substrate for the MDM2 ubiquitin ligase: dihydrofolate reductase (DHFR). MDM2 binds directly to DHFR and catalyses its monoubiquitination and not its polyubiquitination. In addition, MDM2 expression reduces DHFR activity in a p53-independent manner, but has no effect upon the steady-state level of expression of DHFR. We show that changes in MDM2 expression alter folate metabolism in cells as evidenced by MDM2-dependent alteration in the sensitivity of cells to the antifolate drug methotrexate. Furthermore, we show that the ability of MDM2 to inhibit DHFR activity depends upon an intact MDM2 RING finger. Our studies provide for the first time a link between MDM2, an oncogene with a critical ubiquitin ligase activity and a vital one-carbon donor pathway involved in epigenetic regulation, and DNA metabolism, which has wide ranging implications for both cell biology and tumor development.