Transcription factor NF-kappa-B comprises two proteins, p50 and p65, that have sequence similarity to the v-rel oncogene. In primary hematopoietic cell populations an alternatively spliced form of NF-kappa-B p65 mRNA was observed that encoded a protein designated p65-DELTA. Expression of the p65-DELTA cDNA in Rat-1 fibroblasts resulted in focus formation, anchorage-independent growth in soft agar, and tumor formation in athymic nude mice, effects not obtained with expression of p65 or a p65-DELTA mutant that contains a disruption within the transcriptional activation domain. Thus, p65-DELTA, which associated weakly and interfered with DNA binding by p65, may sequester an essential limiting regulatory factor or factors required for NF-kappa-B function.