Most human tumours have genetic mutations in their Rb and p53 pathways, but retinoblastoma is thought to be an exception. Studies suggest that retinoblastomas, which initiate with mutations in the gene retinoblastoma 1 (RB1), bypass the p53 pathway because they arise from intrinsically death-resistant cells during retinal development. In contrast to this prevailing theory, here we show that the tumour surveillance pathway mediated by Arf, MDM2, MDMX and p53 is activated after loss of RB1 during retinogenesis. RB1-deficient retinoblasts undergo p53-mediated apoptosis and exit the cell cycle. Subsequently, amplification of the MDMX gene and increased expression of MDMX protein are strongly selected for during tumour progression as a mechanism to suppress the p53 response in RB1-deficient retinal cells. Our data provide evidence that the p53 pathway is inactivated in retinoblastoma and that this cancer does not originate from intrinsically death-resistant cells as previously thought. In addition, they support the idea that MDMX is a specific chemotherapeutic target for treating retinoblastoma.