We demonstrate that a member of the fos family, the fosB gene, gives rise to two transcripts by alternative splicing of exon 4, generating two proteins, FosB of 338 amino acids and a short form, FosB/SF, which contains the DNA binding and dimerization domains but not the 101 amino acids of the C terminus. FosB/SF activates an AP-1-chloramphenicol acetyltransferase construct in NIH 3T3 cells, as determined by transient and stable transfections, although more weakly than does FosB. In contrast to FosB, FosB/SF has lost its ability to repress the dyad symmetry element of the c-fos gene. FosB/SF when expressed in excess to FosB can downmodulate the activity of FosB. Constitutive expression of high levels of FosB/SF in NIH 3T3 cells has no significant inhibitory effect in the induction of cell proliferation or cell cycle progression, indicating that FosB/SF is not a negative regulator of cell growth. This conclusion is further confirmed by the observation that the majority of the Jun molecules are complexed with FosB/SF in the FosB/SF-overexpressing cells.