The transcription factor p73, a member of the p53 family of proteins, is involved in the regulation of cell cycle progression and apoptosis. However, the regulatory mechanisms controlling the distinct roles for p73 in these two processes have remained unclear. Here, we report that p73 is able to induce cell cycle arrest independently of its amino-terminal transactivation domain, whereas this domain is crucial for p73 proapoptotic functions. We also characterized a second transactivation domain in the carboxy terminus of p73 within amino acid residues 381 to 399. This carboxy terminus transactivation domain was found to preferentially regulate genes involved in cell cycle progression. Moreover, its activity is regulated throughout the cell cycle and modified by protein kinase C-dependent phosphorylation at serine residue 388. Our results suggest that this novel posttranslational modification within the p73 carboxy terminus transactivation domain is involved in the context-specific guidance of p73 toward the selective induction of cell cycle arrest.