We have cloned the human jun-B gene and determined its sequence and transforming and trans-activating activities. jun-B is less potent that c-jun in transforming and immortalizing primary rat embryo cells in cooperation with activated ras (effects enhanced by c-fos and TPA); unlike c-jun, jun-B does not transform Rat-1A cells alone. However, cotransfection of c-jun and jun-B into primary rat embryo cells with c-Ha-ras results in a significant decrease in transformation compared with c-jun alone, an event reversed by TPA. Cotransfection of c-jun and jun-B with or without c-fos into F9 teratocarcinoma cells results in decreased trans-activation of AP-1 compared with either gene alone. Introduction of jun-B into primary rat c-jun/ras transformants or c-jun into jun-B/ras transformants also results in a decrease in trans-activation. These findings demonstrate that, whereas jun-B and c-jun each participate in AP-1 trans-activation and malignant transformation, interactions between them involve negative regulation.