Previously, we reported that the LMP 1 gene of Epstein-Barr virus (EBV) derived from nasopharyngeal carcinoma (NPC) tissues (i.e., NLMP 1 gene) was able to transform BALB/c3T3 cells. On the other hand, LMP 1 gene of B95-8 strain (i.e., BLMP 1 gene) was not able to transform these cells (Chen et aL, 1992). Further studies indicated that a 10-amino-acid deletion in the carboxyl terminus of NLMP 1 played an important role in transformation (Li et al., 1996). In this study, we tested if this 10-amino-acid deletion affected the induction of NF-kappaB activity by LMP 1. The long terminal repeat of the human immunodeficiency virus type 1 (HIV-1 LTR) contained two copies of NF-kappaB sites and was used to construct the Luc gene-based reporter plasmid, p kappaB-Luc. Plasmid p kappaB-Luc was co-transfected with plasmids containing the NLMP 1 gene, BLMP 1 gene, and their chimeric or deletion constructs, respectively, into C-33A and BALB/c3T3 cells. The activation was then measured by the luciferase activity. Results showed that the full-length proteins induced a similar level of NF-kappaB activity, the two 3' mutants (R15delta and D4delta) still induced a relatively high level of activity, and the two 5' deletion mutants (delta3058 and delta3243) of NLMP 1 gene did not show any significant activation in C-33A cells. However, none of these LMP 1 proteins induced NF-kappaB activity in BALB/c3T3 cells. Using subcellular fractionation analysis and an immunocytostaining method, the truncated proteins of delta3058 and delta3243 were detected in the cytoplasm of the cells whereas the full-length NLMP 1 protein was located at the cytoplasmic membrane. Stable BALB/c3T3 cell clones that expressed both truncated proteins were established and then their ability to induce tumors in nude mice was examined. Data showed that both truncated NLMP 1 proteins still maintained partial transformation activity. Our results suggested that there was no direct correlation between NF-kappaB activation and transformation activity of LMP 1 in BALB/c3T3 cell transformation and that the amino-terminal membrane-spanning domain was important for maintaining both functions of LMP 1.