We present evidence that CRE-BP1 binding to the cyclic AMP (cAMP) response element (CRE) is a transcriptional activator. Transcriptional activation was assayed by cotransfection into CV-1 cells of a CRE-BP1 expression plasmid together with a reporter plasmid in which the thymidine kinase promoter and four tandem repeats of CRE were linked to the chloramphenicol acetyltransferase (CAT) gene. Cotransfection with the CRE-BP1 expression plasmid caused an 8-fold stimulation of CAT activity, while cotransfection with the plasmids to express CRE-BP1 and c-Jun induced a 32-fold stimulation of CAT activity, suggesting that a heterodimer of CRE-BP1 with c-Jun is a stronger trans-activator than a homodimer of CRE-BP1. By using a series of deletion and point mutants of CRE-BP1 in this cotransfection assay, two functional domains of CRE-BP1 were identified: the putative metal finger structure in the amino-terminal region and the leucine zipper motif linked to a cluster of basic amino acids in the carboxyl-terminal region. The former was a transcriptional activation domain in the absence of c-Jun. The latter was a DNA-binding domain, and was essential in both the presence and absence of c-Jun.