The muE3 motif within the immunoglobulin heavy-chain enhancer is required for full enhancer activity and is known to bind one, or perhaps a family, of related ubiquitous nuclear proteins. Here, we present the isolation of a cDNA that encodes an apparently novel microE3-binding protein designated TFE3. The major open reading frame of the cDNA predicts a protein of 59 kD, with a leucine zipper situated adjacent to an myc-related motif that has been proposed to assume a helix-loop-helix structure. Both of these motifs have been shown (for other proteins) to facilitate protein-protein interactions and DNA binding. Expression of the cDNA in 3T3 cells stimulates transcription from an artificial promoter consisting of four muE3 sites linked to a TATA box and also augments transcription of a reporter gene when it is linked to multiple copies of a particular heavy-chain enhancer subfragment but not when it is linked to the intact enhancer. Using GAL4 fusion proteins, we mapped a strong transcription activation domain within TFE3 that is distinct from the leucine zipper and helix-loop-helix motifs and includes a potential negative amphipathic helix. Like the other muE3-binding proteins detected in nuclear extracts, in vitro-synthesized TFE3 also binds to the USF/MLTF site found in the adenovirus major late promoter.