The intra-cellular level of tumor suppressor protein p53 is tightly controlled by an autoregulatory feedback loop between the protein and its negative regulator MDM2. The role of MDM2 in down-regulating the p53 response in unstressed conditions and in the post-stress recovery phase is well documented. However, interplay between the N-terminal phosphorylations and C-terminal acetylations of p53 in this context remains unclear. Here, we show that an MAR binding protein SMAR1 interacts with MDM2 and the Ser15 phosphorylated form of p53, forming a ternary complex in the post stress-recovery phase. This triple complex formation between p53, MDM2 and SMAR1 results in recruitment of HDAC1 to deacetylate p53. The deacetylated p53 binds poorly to the target promoter (p21), which results in switching off the p53 response, essential for re-entry into the cell cycle. Interestingly, the knock-down of SMAR1 using siRNA leads to a prolonged cell-cycle arrest in the post stress recovery phase due to ablation of p53-MDM2-HDAC1 interaction. Thus, the results presented here for the first time highlight the role of SMAR1 in masking the active phosphorylation site of p53, enabling the deacetylation of p53 by HDAC1-MDM2 complex, thereby regulating the p53 transcriptional response during stress rescue.