Transcription factors of the CREB/ATF family bind to a consensus DNA sequence TGACGTCA (cyclic AMP response element) found in the promoters of numerous genes. Transcriptional activation by one of these proteins, CREB, has been extensively analyzed, but the function of the other family members is not well understood. We have analyzed the function of mXBP (CRE-BP1, ATF-2), one member of the CREB/ATF family of transcription factors. Overexpression of mXBP resulted in the transcriptional activation of a promoter containing cAMP response elements which bind mXBP. Mutagenesis of the mXBP DNA-binding domain identified residues important for binding to the cyclic AMP response element. Mutants that did not bind specifically to DNA were not able to activate transcription. Several of these mutants suppressed both DNA binding and transcriptional activation by wild-type mXBP. These dominant negative mutants will be useful in further analysis of mXBP function.