The v-Rel oncoprotein belongs to the Rel/NF-B family of transcription factors and induces aggressive lymphomas in chickens and transgenic mice. Current models for cell transformation by v-Rel invoke the combined activation of gene expression and the dominant inhibition of transcription mediated by its cellular homologs. Here, we mapped a serine-rich transactivation domain in the C terminus of v-Rel that is necessary for its biological activity. Specific serine-to-alanine substitutions within this region impaired the transcriptional activity of v-Rel, whereas a double mutant abolished its function. In contrast, substitutions with phosphomimetic aspartate residues led to a complete recovery of the transcriptional potential. The transforming activity of v-Rel mutants correlated with their ability to inhibit programmed cell death. The transforming and antiapoptotic activities of v-Rel were abolished by defined Ser-to-Ala mutations and restored by most Ser-to-Asp substitutions. However, one Ser-to-Asp mutant showed wild-type transactivation ability but failed to block apoptosis and to transform cells. These results show that the transactivation function of v-Rel is necessary but not sufficient for cell transformation, adding an important dimension to the transformation model. It is possible that defined protein-protein interactions are also required to block apoptosis and transform cells. Since v-Rel is an acutely oncogenic member of the Rel/NF-B family, our data raise the possibility that phosphorylation of its serine-rich transactivation domain may regulate its unique biological activity.