The v-Rel oncoprotein of the avian Rev-T retrovirus is a member of the Rel/NF-kappa B family of transcription factors. The mechanism by which v-Rel malignantly transforms chicken spleen cells is not precisely known. To gain a better understanding of functions needed for transformation by v-Rel, we have now characterized the activities of mutant v-Rel proteins that are defective for specific protein-protein interactions. Mutant v-delta NLS, which has a deletion of the primary v-Rel nuclear localizing sequence, does not interact efficiently with I kappa B-alpha but still transforms chicken spleen cells approximately as well as wild-type v-Rel, indicating that interaction with I kappa B-alpha is not essential for the v-Rel transforming function. A second v-Rel mutant, v-SPW, has been shown to be defective for the formation of homodimers, DNA binding, and transformation. However, we now find that v-SPW can form functional DNA-binding heterodimers in vitro and in vivo with the cellular protein NF-kappa B p-52. Most strikingly, coexpression of v-SPW and p52 from a retroviral vector can induce the malignant transformation of chicken spleen cells, whereas expression of either protein alone cannot. Our results are most consistent with a model wherein Rel homodimers or heterodimers must bind DNA and alter gene expression in order to transform lymphoid cells.