The EWS gene, which maps to band q12 of human chromosome 22, is involved in a wide variety of human solid tumors including Ewing sarcoma, related primitive neuroectodermal tumors, malignant melanoma of soft parts and desmoplastic small round cell tumors. In these tumors, the EWS is fused to genes encoding transcriptional activators/repressors, like Fli-1 or erg or ATF 1 or wt1. To better understand the function of the EWS protein, we cloned the EWS cDNA. Sequence analysis of this cDNA revealed differential splicing involving two exons encoding 72 amino acids. Both alternatively spliced transcripts, EWS and EWS-b, are expressed in a variety of cells. Because EWS proteins contain putative conserved RNA binding motifs, we studied the RNA binding properties of the EWS protein. The EWS-b protein binds to RNA in vitro and, specifically, to poly G and poly U. The RNA binding activity was localized to the carboxy terminal 86 amino acids, which constitute RGG box. Thus the amino terminal domain of EWS (NTD-EWS), which is involved in chromosome translocation may regulate the specificity of RNA binding activity of EWS. An EWS-erg chimeric protein, which is found in Ewing's sarcoma cells, functions as a transcriptional activator. Mutational analysis of EWS-erg chimeric protein revealed that NTD-EWS functions as a regulatory domain for the transcriptional activation properties of EWS-erg chimeric protein.