The oncogene GLI1 is involved in the formation of basal cell carcinoma and other tumor types as a result of the aberrant signaling of the Sonic hedgehog-Patched pathway. In this study, we have identified alternative GLI1 transcripts that differ in their 5 untranslated regions (UTRs) and are generated by exon skipping. These are denoted ␣-UTR, -UTR, and ␥-UTR according to the number of noncoding exons possessed (three, two, and one, respectively). The ␣-and -UTR forms represent the major Gli1 transcripts expressed in mouse tissues, whereas the ␥-UTR is present at relatively low levels but is markedly induced in mouse skin treated with 12-Otetradecanoylphorbol 13-acetate. Transcripts corresponding to the murine  and ␥ forms were identified in human tissues, but significantly, only the ␥-UTR form was present in basal cell carcinomas and in proliferating cultures of a keratinocyte cell line. Flow cytometry analysis determined that the ␥-UTR variant expresses a heterologous reporter gene 14 -23-fold higher than the ␣-UTR and 5-13-fold higher than the -UTR in a variety of cell types. Because expression of the ␥-UTR variant correlates with proliferation, consistent with a role for GLI1 in growth promotion, up-regulation of GLI1 expression through skipping of 5 noncoding exons may be an important tumorigenic mechanism.