Mouse double minute 2 (MDM2) protein functionally inactivates the tumor suppressor p53 in human cancer. Conventional MDM2 inhibitors provide limited clinical application as they interfere only with the MDM2–p53 interaction to release p53 from MDM2 sequestration but do not prevent activated p53 from transcriptionally inducing MDM2 expression. Here, we report a rationally synthesized chalcone-based pyrido[b]indole, CPI-7c, as a unique small-molecule inhibitor of MDM2, which not only inhibited MDM2–p53 interaction but also promoted MDM2 degradation. CPI-7c bound to both RING and N-terminal domains of MDM2 to promote its ubiquitin-mediated degradation and p53 stabilization. CPI-7c-induced p53 directly recruited to the promoters of DR4 and DR5 genes and enhanced their expression, resulting in sensitization of TNF-related apoptosis-inducing ligand (TRAIL)-resistant cancer cells toward TRAIL-induced apoptosis. Collectively, we identified CPI-7c as a novel small-molecule inhibitor of MDM2 with a unique two-prong mechanism of action that sensitized TRAIL-resistant cancer cells to apoptosis by modulating the MDM2–p53–DR4/DR5 pathway.