The E3 ubiquitin ligase MDM2 functions as a crucial negative regulator of the p53 tumor suppressor protein by antagonizing p53 transactivation activity and targeting p53 for degradation. Cellular stress activates p53 by alleviating MDM2-mediated functional inhibition, even though the molecular mechanisms of stress-induced p53 activation still remain poorly understood. Two opposing models have been proposed to describe the functional and structural role in p53 activation of Ser17 phosphorylation in the N-terminal "lid" (residues 1-24) of MDM2. Using the native chemical ligation technique, we synthesized the p53-binding domain (1-109)MDM2 and its Ser17-phosphorylated analogue (1-109)MDM2 pS17 as well as (1-109)MDM2 S17D and (25-109)MDM2, and comparatively characterized their interactions with a panel of p53-derived peptide ligands using surface plasmon resonance, fluorescence polarization, and NMR and CD spectroscopic techniques. We found that the lid is partially structured in apo-MDM2 and occludes p53 peptide binding in a ligand size-dependent manner. Binding of (1-109)MDM2 by the (15-29)p53 peptide fully displaces the lid and renders it completely disordered in the peptide-protein complex. Importantly, neither Ser17 phosphorylation nor the phospho-mimetic mutation S17D has any functional impact on p53 peptide binding to MDM2. Although Ser17 phosphorylation or its mutation to Asp contributes marginally to the stability of the lid conformation in apo-MDM2, neither modification stabilizes apo-MDM2 globally or the displaced lid locally. Our findings demonstrate that Ser17 phosphorylation is functionally neutral with respect to p53 binding, suggesting that MDM2 phosphorylation at a single site is unlikely to play a dominant role in stress-induced p53 activation.