Updated project metadata. Ceramides are important participants of signal transduction, regulating fundamental cellular processes. Here we report the mechanism for activation of p53 tumor suppressor by C16-ceramide. C16-ceramide tightly binds within the p53 DNA binding domain (Kd ~ 60 nM), in close vicinity to the Box V motif. This interaction is highly selective towards the ceramide acyl chain length with its C10 atom being proximal to Ser240 and Ser241. Ceramide binding stabilizes p53 and disrupts its complex with E3 ligase MDM2 leading to the p53 accumulation, nuclear translocation and activation of the downstream targets. This is a novel physiological mechanism of p53 activation, which is fundamentally different from the canonical p53 regulation through protein-protein interactions or post-translational modifications. The discovered mechanism is triggered by serum or folate deprivation implicating it in the cellular response to nutrient/metabolic stress. Our study establishes C16-ceramide as the first natural small molecule activating p53 through the direct binding.