Lymphoid enhancer-binding factor-1 (LEF-1), a member of the high mobility group (HMG) family of proteins, regulates expression of T-cell receptor-alpha gene and is one of the key regulatory molecules in the epithelial-mesenchymal interactions during embryonic development. Among others, LEF-1 regulates expression of cytokeratin genes involved in formation of hair follicles and the gene encoding the cell-adhesion molecule E-cadherin. Transcription factor LEF-1, which acts as a dimer, binds beta-catenin and is involved in signal transduction by the wnt pathway. We have cloned and sequenced a novel isoform of human LEF-1 gene transcript. This isoform encodes a truncated protein devoid of HMG domain and nuclear localization signal but retaining beta-catenin binding domain. This isoform might either act in a dominant-negative manner by interfering with native LEF-1, or might bind beta-catenin in the cytosol, which would result in attenuation of the signals transmitted by the LEF-beta-catenin pathway.