Characterisation of EWS-Oct-4 translocation fusion product in bone and soft-tissue tumours revealed a chimeric gene resulting from an in-frame fusion between EWS (Ewing's sarcoma gene) exons 1-6 and Oct-4 exons 1-4. Recently, an alternative form of the fusion protein between the EWS and Oct-4 genes, named EWS-Oct-4B, was reported in two types of epithelial tumours, a hidradenoma of the skin and a mucoepidermoid carcinoma of the salivary glands. As the N-terminal and POU domains of the EWS-Oct-4 and EWS-Oct-4B proteins are not structurally identical, we decided to investigate the functional consequences of the EWS-Oct-4B fusion.In this report, we have characterised the EWS-Oct-4B fusion protein. To investigate how the EWS-Oct-4B protein contributes to tumourigenesis in human cancers, we analysed its DNA-binding activity, subcellular localisation, transcriptional activation behaviour, and oncogenic properties.We found that this new chimeric gene encodes a nuclear protein that binds DNA with the same sequence specificity as the parental Oct-4 protein or the fusion EWS-Oct-4 protein. We show that the nuclear localisation signal of EWS-Oct-4B is dependent on the POU DNA-binding domain, and we identified a cluster of basic amino acids, (269)RKRKR(273), in the POU domain that specifically mediates the nuclear localisation of EWS-Oct-4B. Comparison of the properties of EWS-Oct-4B and EWS-Oct-4 indicated that EWS-Oct-4B is a less-potent transcriptional activator of a reporter construct carrying the Oct-4-binding sites. Deletion analysis of the functional domains of EWS-Oct-4B revealed that the EWS N-terminal domain (NTD)(B), POU, and C-terminal domain (CTD) are necessary for its full transactivation potential. Despite its reduced activity as a transcriptional activator, EWS-Oct-4B regulated the expression of fgf-4 (fibroblast growth factor-4) and nanog, which are potent mitogens, as well as of Oct-4 downstream target genes, the promoters of which contain potential Oct-4-binding sites. Finally, ectopic expression of EWS-Oct-4B in Oct-4-null ZHBTc4 ES cells resulted in increased tumourigenic growth potential in nude mice.These results suggest that the oncogenic effect of the t(6;22) translocation is due to the EWS-Oct-4B chimeric protein, and that alternative fusion of the EWS amino terminal domain to the Oct-4 DNA-binding domain produces another transforming chimeric product in human epithelial tumours.