The E2F transcription factors are essential for regulating the correct timing of activation of several genes whose products are implicated in cell proliferation and DNA replication. The E2Fs are targets for negative regulation by the retinoblastoma protein family, which includes pRB, p107, and p130, and they are in a pathway that is frequently found altered in human cancers. There are five members of the E2F family, and they can be divided into two functional subgroups. Whereas, upon overexpression, E2F-1, -2, and -3 induce S phase in quiescent fibroblasts and override G1 arrests mediated by the p16INK4A tumor suppressor protein or neutralizing antibodies to cyclin D1, E2F-4 and -5 do not. Using E2F-1 and E2F-4 as representatives of the two subgroups, we showed here, by constructing a set of chimeric proteins, that the amino terminus of E2F-1 is sufficient to confer S-phase-inducing potential as well as the ability to efficiently transactivate an E2F-responsive promoter to E2F-4. We found that the E2F-1 amino terminus directs chimeric proteins to the nucleus. Surprisingly, a short nuclear localization signal derived from simian virus 40 large T antigen could perfectly substitute for the presence of the E2F-1 amino terminus in these assays. Thus, nuclearly localized E2F-4, when overexpressed, displayed biological activities similar to those of E2F-1. Furthermore, we showed that nuclear localization of endogenous E2F-4 is cell cycle regulated, with E2F-4 being nuclear in the G0 and early G1 phases and mainly cytoplasmic after the pRB family members have become phosphorylated. We propose a novel mechanism for the regulation of E2F-dependent transcription in which E2F-4 regulates transcription only from G0 until mid- to late G1 phase whereas E2F-1 is active in late G1 and S phases, until it is inactivated by cyclin A-dependent kinase in late S phase.