B lymphocytes contain an octamer-binding transcription factor, Oct-2, that is absent in most other cell types and plays a critical role in the B-cell-specific transcription of the immunoglobulin genes. A neuronal form of this protein has also been detected in brain and neuronal cell lines by using a DNA mobility shift assay, and an Oct-2 mRNA is observed in these cells by Northern (RNA) blotting and in situ hybridization. We show that the neuronal form of Oct-2 differs from that found in B cells with respect to both DNA-binding specificity and functional activity. In particular, whereas the B-cell protein activates octamer-containing promoters, the neuronal protein inhibits octamer-mediated gene expression. The possible role of the neuronal form of Oct-2 in the regulation of neuronal gene expression and its relationship to B-cell Oct-2 are discussed.