We have shown that the murine c-rel protein can act as a transcriptional transactivator in both yeast and mammalian cells. Fusion proteins generated by linking rel sequences to the DNA-binding domain of the yeast trascriptional activator GAL4 activate transcription from a reporter gene linked in cis to a GAL4 binding site. The full-length mouse c-rel protein (588 amino acids long) is a poor transactivator; however, the C-terminal portion of the protein between amino acid residues 403 to 568 is a potent transcriptional transactivator. Deletion of the N-terminal half of the c-rel protein augments its transactivation function. We propose that c-rel protein has an N-terminal regulatory domain and a C-terminal transactivation domain which together modulate its function as a transcriptional transactivator.