The transcriptional regulator VIVIPA-ROUS1 (VP1) is composed of four functional domains that control different aspects of gene expression during seed development. The B2 domain is required for its role as a transcriptional activator, functioning at the site of transcription and/or for its transport into the nucleus. Previous work showed that the B2 domain was required for transactivation of the Em promoter. We demonstrate that VP1::GFP localizes to the nucleus of barley (Hordeum vulgare) aleurone cells, but when B2 is deleted, nuclear accumulation is lost. However, the B2 domain itself is not sufficient for nuclear localization of GFP::GUS. Using point mutagenesis on the putative NLS within B2, we show that the VP1::GFP still accumulates in the nucleus. Utilizing a comparative approach, through the alignment of B2 domains from various VP1/ABI3 proteins, oincluding the ABI3 orthologs from Physcomitrella patens, revealed the involvement of other conserved amino acids. Mutating VP1 at the conserved threonine on the N-terminal side of the putative NLS and at a conserved arginine-glutamine-arginine sequence on the C-terminal side prevented nuclear localization of VP1. A single amino acid change, from alanine to threonine, within this NLS found in the Arabidopsis abi3-7 mutant prevents transcription of AtEm1 and AtEm6 in vivo. We show that this same mutation in VP1 prevents transactivation of the Em-GUS reporter in barley aleurone but does not interfere with nuclear localization. Our data demonstrate that the B2 domain of VP1 is bifunctional in nature regulating both nuclear localization and transactivation.