The til-1 locus was identified as a common retroviral integration site in virus-accelerated lymphomas of CD2-myc transgenic mice. We now show that viral insertions at til-1 lead to transcriptional activation of PEBP2alphaA (CBFA1), a transcription factor related to the Drosophila segmentation gene product, Runt. Insertions are upstream and in the opposite orientation to the gene and appear to activate a variant promoter that is normally silent in T cells. Activity of this promoter was detected in rodent osteogenic sarcoma cells and primary osteoblasts, implicating bone as the normal site of promoter activity. The isoforms encoded by the activated gene all encompass the conserved runt DNA-binding domain and share a novel N terminus different from the previously reported PEBP2alphaA products. Minor products include isoforms with internal deletions due to exon skipping and a novel C-terminal domain unrelated to known runt domain factors. The major isoform expressed from the activated til-1 locus (G1) was found to account for virtually all of the core binding factor activity in nuclear extracts from its corresponding lymphoma cell line. Another member of this gene family, AML1(CBFA2), is well known for its involvement in human hemopoietic tumors. These results provide evidence of a direct oncogenic role for PEBP2alphaA and indicate that the Myc and Runt family genes can cooperate in oncogenesis.