Nuclear factor I (NFI) proteins constitute a family of sequence-specific transcription factors whose functional diversity is generated through transcription from four different genes (NFI-A, NFI-B, NFI-C, and NFI-X), alternative RNA splicing, and protein heterodimerization. Here we describe a naturally truncated isoform, NFI-B3, which is derived from the human NFI-B gene, in addition to characterizing further human NFI-B1 and NFI-B2, two differentially spliced variants previously isolated from hamster and chicken. Although NFI-B1 and NFI-B2 proteins are translated from an 8. 7-kilobase message, the mRNA for NFI-B3 has a size of only 1.8 kilobases. The NFI-B3 message originates from the failure to excise the first intron downstream of the exons encoding the DNA binding domain and subsequent processing of this transcript at an intron-internal polyadenylation signal. The translation product includes the proposed DNA binding and dimerization domain and terminates after translation of two additional "intron" encoded codons. In SL-2 cells, which are void of endogenous NFI, NFI-B3 by itself had no effect on transcriptional regulation and failed to bind DNA. Coexpression of NFI-B3 with other isoforms of the NFI-B, -C, and -X family, however, led to a strong reduction of transcriptional activation compared with the expression of these factors alone. Gel shift analysis indicated that NFI-B3 disrupts the function of other NFI proteins by reducing their DNA binding activity by heterodimer formation. The efficiency of NFI-B3 heterodimers to bind to DNA correlated with the degree of transcriptional repression. The abundance of NFI-B transcripts varied significantly between different human cell lines and tissues, suggesting a potential involvement of these factors in the complex mechanisms that generate cell type specificity.