Two isoforms of the CCAAT-displacement protein/cut homeobox (CDP/Cux) transcription factor have been characterized thus far. The full length protein, p200, which contains four DNA binding domains, transiently binds to DNA and carries the CCAAT-displacement activity. The p110 isoform is generated by proteolytic processing at the G1-S transition and is capable of stable interaction with DNA. Here we demonstrate the existence of a shorter CDP/Cux isoform, p75, which contains only two DNA binding domains, Cut repeat 3 and the Cut homeodomain, and binds more stably to DNA. CDP/Cux p75 was able to repress a reporter carrying the promoter for the cyclin-dependent kinase inhibitor p21 gene and to activate a DNA polymerase alpha gene reporter. Expression of CDP/Cux p75 involved a novel mechanism: transcription initiation within intron 20. The intron 20-initiated mRNA (I20-mRNA) was expressed at higher level in the thymus and in CD4+/CD8+ and CD4+ T cells. I20-mRNA was expressed only weakly or not at all in normal human mammary epithelial cells and normal breast tissues but was detected in many breast tumor cells lines and breast tumors. In invasive tumors a significant association was established between higher I20-mRNA expression and a diffuse infiltrative growth pattern (n = 41, P = 0.0137). In agreement with these findings, T47D breast cancer cells stably expressing p75 could not form tubule structures in collagen but rather developed as solid undifferentiated aggregates of cells. Taken together, these results suggest that aberrant expression of the CDP/Cux p75 isoform in mammary epithelial cells may be associated with the process of tumorigenesis in breast cancer.