The NF-kappa B1 subunit of the transcription factor NF-kappa B is derived by proteolytic cleavage from the N terminus of a 105-kDa precursor protein. The C terminus of p105NF-kappa B1, like those of I kappa B proteins, contains ankyrin-related repeats that inhibit DNA binding and nuclear localization of the precursor and confer I kappa B-like properties upon p105NF-kappa B1. Here we report the characterization of two novel NF-kappa B1 precursor isoforms, p84NF-kappa B1 and p98NF-kappa B1, that arise by alternate splicing within the C-terminal coding region of murine nfkb1. p98NF-kappa B1, which lacks the 111 C-terminal amino acids (aa) of p105NF-kappa B1, has a novel 35-aa C terminus encoded by an alternate reading frame of the gene. p84NF-kappa B1 lacks the C-terminal 190 aa of p105NF-kappa B1, including part of ankyrin repeat 7. RNA and protein analyses indicated that the expression of p84NF-kappa B1 and p98NF-kappa B1 is restricted to certain tissues and that the phorbol myristate acetate-mediated induction of p84NF-kappa B1 and p105NF-kappa B1 differs in a cell-type-specific manner. Both p84NF-kappa B1 and p98NF-kappa B1 are found in the nuclei of transfected cells. Transient transfection analysis revealed that p98NF-kappa B1, but not p105NF-kappa B1 or p84NF-kappa B1, acts as a transactivator of NF-kappa B-regulated gene expression and that this is dependent on sequences in the Rel homology domain required for DNA binding and on the novel 35 C-terminal aa of this isoform. In contrast to previous findings, which indicated that p105NF-kappa B1 does not bind DNA, all of the NF-kappa B1 precursors were found to specifically bind with low affinity to a highly restricted set of NF-kappa B sites in vitro, thereby raising the possibility that certain of the NF-kappa B1 precursor isoforms may directly modulate gene expression.