Genome studies have uncovered many examples of essential gene loss, raising the question of how ancient genes transition from essentiality to dispensability. We explored this process for the deeply conserved E3 ubiquitin ligase Murinedouble minute (Mdm), which is lacking in Drosophila despite the conservation of its main regulatory target, the cellular stress response gene p53. Conducting gene expression and knockdown experiments in the red flour beetle Tribolium castaneum, we found evidence that Mdm has remained essential in insects where it is present. Using bioinformatics approaches, we confirm the absence of the Mdm gene family in Drosophila, mapping its loss to the stem lineage of schizophoran Diptera and Pipunculidae (big-headed flies), about 95-85 million years ago. Intriguingly, this gene loss event was preceded by the de novo origin of the gene Companion of reaper (Corp), a novel p53 regulatory factor that is characterized by functional similarities to vertebrate Mdm2 despite lacking E3 ubiquitin ligase protein domains. Speaking against a 1:1 compensatory gene gain/loss scenario, however, we found that hoverflies (Syrphidae) and pointed-wing flies (Lonchopteridae) possess both Mdm and Corp. This implies that the two p53 regulators have been coexisting for ~ 150 million years in select dipteran clades and for at least 50 million years in the lineage to Schizophora and Pipunculidae. Given these extensive time spans of Mdm/Corp coexistence, we speculate that the loss of Mdm in the lineage to Drosophila involved further acquisitions of compensatory gene activities besides the emergence of Corp. Combined with the previously noted reduction of an ancestral P53 contact domain in the Mdm homologs of crustaceans and insects, we conclude that the loss of the ancient Mdm gene family in flies was the outcome of incremental functional regression over long macroevolutionary time scales.