The basic helix-loop-helix gene Hes3 is expressed by differentiating and mature Purkinje cells in the cerebellum and by neural precursor cells in the embryonal nervous system. We here found that the transcript of cerebellar Hes3, designated Hes3a, has a distinct 5'-terminal structure from that of embryonal Hes3, designated Hes3b, and that the two types of Hes3 transcripts are generated from different first exons. Hes3a lacks the amino-terminal half of the basic region and thus does not bind to the DNA, whereas Hes3b contains a complete basic region and binds to the N box sequence with a high affinity like Hes1, another member of the Hes family. Both types of Hes3 proteins functionally antagonize the neuronal determination factor Mash1, but only Hes3b represses transcription from the N box-containing promoter like Hes1. Furthermore, misexpression of Hes3b with retrovirus in neural precursor cells inhibits neuronal differentiation like Hes1, whereas Hes3a does not. Thus, alternative promoters and first exons that are differentially utilized during neural development generate structurally and functionally distinct proteins from a single Hes3 gene locus.