A yeast two-hybrid screen has identified HBP1 as a transcription facto
r capable of interacting with the pocket protein family. We show that
HBP1 can interact with one of these, RE, both in vitro and in mammalia
n cells. Two distinct RE binding sites are present within HBP1 - a hig
h affinity binding site, mediated by an LXCXE motif and a separate low
affinity binding site present within an activation domain. GAL4-fusio
n experiments indicate that HBP1 contains a masked activation domain.
Deletion of two independent N- and C-terminal inhibitor domains unmask
s an activation domain which is 100-fold more active than the full len
gth protein. The released activation capacity is repressed by RE, p130
and p107. In addition, E1A can repress the activity of HBP1 via conse
rved region 1 sequences in a manner independent of the CBP coactivator
. We show by stable expression in NIH3T3 cells that HBP1 has the capac
ity to induce morphological transformation of cells in culture.