Fos and Jun transcription factors are induced by a variety of extracellular signaling agents. We describe here an unusual member of the Fos family that is also induced, namely, a truncated form of FosB (AFosB) missing the C-terminal 101 amino acids of FosB. AFosB retains the dimerlzatlon and DNA-binding activities of FosB but has lost the ability in transfectlon assays to activate a promoter with an APl site and to repress the c-fos promoter. Rather, AFosB inhibits gene activation by Jun or Jun+ Fos and inhibits repression of the c-fos promoter by FosB or c-Fos, presumably by competing with full-length Fos proteins at the steps of dimerization with Jun and binding to DNA. In stlmulated cells AFosB may act to limit the transcriptional effects of Fos and Jun proteins.