An aberrant truncated hHb1 hair keratin transcript, named hHb1-DeltaN, was previously identified in breast carcinomas. No normal tissue tested so far, including hairy skin, expressed hHb1-DeltaN, indicating that hHb1-DeltaN is related to carcinogenesis. In the present study, we investigated the mechanism by which such truncated transcript was generated in breast cancer cell lines. We found that hHb1-DeltaN transcription is initiated at an unusual cryptic promoter within the fourth intron of the hHb1 gene and is dependent on two proximal Sp1 binding sites for its baseline activity. Moreover, hHb1-DeltaN transcription is increased in response to DNA demethylation by the 5-aza-2'-deoxycytidine drug. This induction is dependent on protein neosynthesis, indicating that an additional factor is required. In addition, we showed that the hHb1-DeltaN transcript is translated in vivo as a truncated hHb1 protein that is missing the 270 amino-terminal residues. The hHb1-DeltaN protein exhibits a filament pattern throughout the cytoplasm and partially co-localizes with cytokeratin filaments, indicating its participation in the cytoskeleton network. hHb1-DeltaN might alter the adhesive properties of cancer cells.