The NFKB-2 gene codes for an NF-B-related transcription factor containing rel-polyG-ankyrin domains. Chromosomal rearrangements of the NFKB-2 locus have been found in various types of lymphoid neoplasms, suggesting that they may contribute to lymphomagenesis. Rearrangements cluster within the 3-terminal ankyrin-encoding domain of the NFKB-2 gene and lead to the production of C-terminally truncated proteins which, in some cases, are fused to heterologous protein domains. In order to determine the functional consequences of these alterations, we have analyzed the subcellular localization, DNA binding, and transcriptional activity of two representative tumor-associated mutants in which the ankyrin domain is either terminally truncated (NFKB-2p85) or truncated and joined to an out-of-frame immunoglobulin C␣ domain (lyt-10C␣). Immunofluorescence studies performed on cells transfected with p85 or lyt-10C␣ expression vectors showed that both the abnormal proteins were constitutively localized in the nucleus. Immunoprecipitation analysis of UV-cross-linked DNA-protein adducts showed that p85 can bind B sites in its unprocessed form. Cotransfection of p85 or lyt-10C␣ expression vectors with B-driven reporter plasmids showed that both p85 and lyt-10C␣ have retained the ability to mediate transcriptional activation via heterodimerization with Rel-Ap65 but have lost the transrepression activity associated with homodimeric DNA binding. Furthermore, both p85 and lyt-10C␣ were capable of independent transactivation of B-reporter genes and this activity could not be further stimulated by Bcl-3. These findings indicate that the tumor-associated NFKB-2 proteins can override the main mechanisms regulating NFKB-2 function and act as constitutive transactivators without interaction with Rel-Ap65 or Bcl-3. These abnormal proteins may contribute to lymphomagenesis by determining a constitutive activation of the NF-B system and, in particular, of NFKB-2 target genes.The NFKB-2 gene (previously named , p50B/p97 [3], p55/p98 [20], and p49/p100 [30]) was independently identified via its involvement in a lymphoma-associated chromosomal translocation (24), its homology to NFKB-1 (20, 30), and its inducible expression in activated T cells (reference 3; for reviews, see references 13, 19, and 32). The NFKB-2 gene is expressed as a single 3.2-kb mRNA species and a 100-kDa primary translation product (p100) which, as NFKB-1 (5), contains an N-terminal DNA-binding rel domain, a poly(G) hinge, and a C-terminal ankyrin domain (7, 24). Analogous to NFKB-1, NFKB-2p100 represents a cytoplasmic precursor which, by proteolytic cleavage of the hinge region, is processed into an active molecule, p52, retaining the rel domain but losing the ankyrin domain (7, 21). NFKB-2p52 is found in the cytoplasm within complexes of 28,29) and IB (9) and can be found in the nucleus upon NF-B activation (7, 21). Although NFKB-2p52 has no intrinsic transcriptional activity, it can stimulate transcription by heterodimerizing with Rel-Ap65 or inhibit it by occupying B site...