Members of the Myc family of proteins share a number of protein motifs that are found in regulators of gene transcription. Conserved stretches of amino acids found in the N-terminal transcriptional activation domain of c-Myc are required for cotransforming activity. Most of the Myc proteins contain the basic helix-loop-helix zipper (bHLH-Zip) DNA-binding motif which is also required for the cotransforming activity of c-Myc. L-Myc, the product of a myc family gene that is highly amplified in many human lung carcinomas, was found to cotransform primary rat embryo cells with an activated ras gene. However, L-Myc cotransforming activity was only 1 to 10% of that of c-Myc (M. J. Birrer, S. Segal, J. S. DeGreve, F. Kaye, E. A. Sausville, and J. D. Minna, Mol. Cell. Biol. 8:2668-2673, 1988). We sought to determine whether functional differences between c-Myc and L-Myc in either the N-terminal or the C-terminal domain could account for the relatively diminished L-Myc cotransforming activity. Although the N-terminal domain of L-Myc could activate transcription when fused to the yeast GAL4 DNA-binding domain, the activity was only 5% of that of a comparable c-Myc domain. We next determined that the interaction of the C-terminal bHLH-Zip region of L-Myc or c-Myc with that of a Myc partner protein, Max, was equivalent in transfected cells. A Max expression vector was found to augment the cotransforming activity of L-Myc as well as that of c-Myc. In addition, a bacterially synthesized DNA-binding domain of L-Myc, like that o c-Myc, heterodimerizes with purified Max protein to bind the core DNA sequence CACGTG. To determine the region of L-Myc responsible for its relatively diminished cotransforming activity, we constructed chimeras containing exons 2 (constituting activation domains) and 3 (constituting DNA-binding domains) of c-Myc fused to those of L-Myc. The cotransforming potencies of these chimeras were compared with those of full-length L-Myc of c-Myc in rat embryo cells. The relative cotransforming activities suggest that the potencies of the activation domains determine the cotransforming efficiencies for c-Myc and L-Myc. This correlation supports the hypothesis that the Myc proteins function in neoplastic cotransformation as transcription factors.