EFTUD2 is mutated in patients with mandibulofacial dysostosis with microcephaly (MFDM). We generated a mutant mouse line with conditional mutation in Eftud2 and used Wnt1-Cre2 to delete it in neural crest cells. Homozygous deletion of Eftud2 causes brain and craniofacial malformations, affecting the same precursors as in MFDM patients. RNAseq analysis of embryonic heads revealed a significant increase in exon skipping and increased levels of an alternatively spliced Mdm2 transcript lacking exon 3. Exon skipping in Mdm2 was also increased in O9-1 mouse neural crest cells after siRNA knock-down of Eftud2 and in MFDM patient cells. Moreover, we found increased nuclear P53, higher expression of P53-target genes and increased cell death. Finally, overactivation of the P53 pathway in Eftud2 knockdown cells was attenuated by overexpression of non-spliced Mdm2, and craniofacial development was improved when Eftud2-mutant embryos were treated with Pifithrin-α, an inhibitor of P53. Thus, our work indicates that the P53-pathway can be targeted to prevent craniofacial abnormalities and shows a previously unknown role for alternative splicing of Mdm2 in the etiology of MFDM.