Max is a basic-helix-loop-helix-leucine zipper protein capable of forming sequence-specific DNA binding complexes with Myc proteins. An alternatively spliced messenger RNA has been identified that encodes a form of Max truncated at the COOH-terminus. This DELTA-Max protein retained the ability to bind to the CACGTG motif in a complex with c-Myc but lacks the nuclear localization signal and the putative regulatory domain of Max. When tested in a myc-ras cotransformation assay in rat embryo fibroblasts, Max suppressed, whereas DELTA-Max enhanced, transformation. Thus, the maxgene may encode both a negative and a positive regulator of c-Myc function.