Dentatorubral and pallidoluysian atrophy (DRPLA) is an autosomal dominant neurodegenerative disorder similar to Huntington's disease, with clinical manifestations including chorea, incoordination, ataxia, and dementia. It is caused by an expansion of a CAG trinucleotide repeat encoding polyglutamine in the atrophin-1 gene. Both patients and DRPLA transgenic mice have nuclear accumulation of atrophin-1, especially an approximately 120-kDa fragment, which appears to represent a cleavage product. We now show that this is an N-terminal fragment that does not correspond to the previously described caspase-3 fragment, or any other known caspase cleavage product. The atrophin-1 sequence contains a putative nuclear localization signal in the N terminus of the protein and a putative nuclear export signal in the C terminus. We have tested the hypothesis that endogenous localization signals are functional in atrophin-1, and that nuclear localization and proteolytic cleavage contribute to atrophin-1 cell toxicity. In transient cell transfection experiments using a neuroblastoma cell line, full-length atrophin-1 with 26 (normal) or 65 (expanded) glutamines localized to both nucleus and cytoplasm, with no significant difference in toxicity between the normal and mutant proteins. A construct with 65 glutamine repeats encoding an N-terminal fragment (which removes an NES) of atrophin-1 similar in size to the truncation product in DRPLA patient tissue, showed increased nuclear labeling, and an increase in cellular toxicity, compared with a similar fragment with 26 glutamines. Full-length atrophin-1 with 65 polyglutamine repeats and mutations inactivating the NES also yielded increased nuclear localization and increased toxicity. These data suggest that truncation enhances cellular toxicity of the mutant protein, and that the NES is a relevant region deleted during truncation. Furthermore, mutating the NLS in the truncated protein shifted atrophin-1 more to the cytoplasm and eliminated the increased toxicity, consistent with the idea that nuclear localization enhances toxicity. In none of the experiments were inclusions visible in the nucleus or cytoplasm suggesting that inclusion formation is unrelated to cell death. These data indicate that truncation of atrophin-1 may alter its ability to shuttle between the nucleus and cytoplasm, leading to abnormal nuclear interactions and cell toxicity.