The POU domain protein GHF-1 has a critical role in generation, proliferation and phenotypic expression of three pituitary cell types. GHF-1 functions in part by binding to and transactivating the promoters of both the growth hormone (GH) and prolactin (PRL) genes and that of the GHF1 gene itself. We describe a naturally occurring isoform of GHF-1, GHF-2, in which an additional 26 amino acids are inserted into the activation domain of the protein as a result of alternative splicing. GHF-2 retains the DNA binding activity of GHF-1 and can activate the GH promoter but has lost the ability to activate the PRL and GHF1 promoters. These results suggest that GHF-2 may function in differential target gene activation during differentiation of the somatotrophic lineage. Both GHF-1 and GHF-2 transcripts are specifically expressed in the anterior pituitary. Analysis of the genomic GHF1 gene shows that most of the distinct functional domains of GHF-1 (and GHF-2) are encoded by separate exons. Gene segment duplication and exon shuffling may have contributed to the evolution of this cell type-specific transcriptional regulatory gene.