The tumor suppressor protein p53 is inhibited while mouse double minute 2 (MDM2) protein binds on its transactivation domain. Overexpression of MDM2 impairs p53 function and are observed in many human tumors. Disruption of MDM2-p53 interaction leads to increased p53 level and restores p53 transcriptional activity. Restoration of p53 activity through inhibiting the interaction between p53 and MDM2 represents a promising approach for cancer therapy. A number of small-molecule p53-MDM2 binding inhibitors have been developed during the past several years. Nutlin-3 has shown a potent and selective small-molecule MDM2 antagonist which has a considerable promise in pre-clinical studies. In this study we investigated theoretically the interaction of Nutlin-3 with MDM2 at atomistic level, and compared to the interaction of p53 with MDM2 to explore the molecular basis of inhibition. In MDM2-p53 model, there are three hydrogen bonding interactions between MDM2 and p53. The lengths of the hydrogen bonds are found to be 2.45, 2.46, and 1.89 whereas interaction energies are -3.82, -3.76, and -5.32 kcal/mol, respectively. The sum of three hydrogen bonding energy is -12.90 kcal/mol. On the other hand, in MDM2-Nutlin-3 model there are four hydrogen bond interactions between MDM2 and Nutlin-3. The bond lengths are found to be 2.29, 1.77, 2.48, and 2.39 whereas interaction energies are -4.21, -6.63, -3.65, and -3.63 kcal/mol, respectively. The sum of three hydrogen bonding energy is -18.12 kcal/mol. From the comparison between two models, it is revealed that MDM2-Nutlin3 model has four hydrogen bonds whereas MDM2-p53 model has three hydrogen bonds. The interaction energy in MDM2-Nutlin-3 is relatively more stable than MDM2-p53 interaction. Due to stronger hydrogen bond interaction with higher interaction energy, Nutlin-3 blocks the p53-binding pocket of MDM2 and thus disrupts the MDM2-p53 interaction and helps to activate p53 pathway of apoptosis.