One group of sequence variants of Epstein-Barr virus is characterized by a 10-amino-acid deletion within the CTAR-2 functional domain of the latent membrane protein, LMP1. A role for this deletion in enhancing the tumorigenicity of the viral oncogene in rodent fibroblasts was recently demonstrated. We examined the effect of this deletion upon LMP1 function in four human lymphoid cell lines by using three natural variants of LMP1: the prototype B95.8 gene and the CAO and AG876 genes, both of which have codons 343 to 352 of the B95.8-LMP1 deleted. These experiments revealed that LMP1-mediated upregulation of CD40 and CD54 was markedly impaired (by 60 to 90%) with CAO-LMP1 compared with B95.8-LMP1. In contrast, the function of AG876-LMP1 was indistinguishable from that of B95.8-LMP1 in two lines and was only slightly impaired in the other two lines. Activation of NF-κB by CAO-LMP1 was not impaired in any of the lines; rather, activation of an NF-κB reporter by CAO-LMP1 was consistently about twofold greater than the activation with B95.8- or AG876-LMP1. Therefore, while the CAO-LMP1 is functionally distinct from the prototype B95.8-LMP1 in human lymphocytes, the 10-amino-acid deletion appears not to be directly responsible. This conclusion was confirmed by using a B95.8-LMP1 mutant with codons 343 to 352 deleted and chimerae of CAO- and B95.8-LMP1 in which the CTAR-2 domains of these genes were exchanged. Sequences outside the CTAR-2 domain were implicated in the distinct functional characteristics of CAO-LMP1 in human lymphoid cells.