Oct-2 is a member of the POU family of transcription factors, which specifically bind to the octamer DNA motif ATGCAAAT and its closely related sequences. Unlike its ubiquitous counterpart Oct-1, Oct-2 is thought to be expressed only in B lymphocytes and neuronal cells and is mainly involved in immunoglobulin gene expression. We show here that Oct-2 is also expressed in the epithelial cells of mouse mammary gland, and that this expression is developmentally regulated. Rapid amplification of cDNA ends and subsequent cDNA cloning indicate that the mammary gland expresses multiple Oct-2 isoforms, including a novel isoform, named Oct-2.7. Compared with Oct-2 (isoform 2.1), the deduced Oct-2.7 sequence has an additional 22 amino acids close to the N-terminus and a novel 76-amino-acid C-terminus resulting from alternative splicing, with retention of the last intron that is spliced out in all other isoforms. Although Oct-2.7 has intact POU-specific and POU-homeo domains, it is unable to bind to the octamer motif, unlike all other known isoforms. Like Oct-1, both Oct-2.1 and Oct-2.7 can activate basal beta-casein gene promoter activity. However, activation by Oct-2.7, which is independent of DNA binding, is significantly lower than that by Oct-2.1. Moreover, deletion of the first 114 amino acids at the N-terminus of Oct-2.1 has no effect on activation; this does not support previous reports of the presence of an inhibitory domain in this region.