Wilms tumor is a pediatric kidney cancer that has been linked to the inactivation of a tumor-suppressor gene at chromosome locus 11p13. The WT1 gene, mapping to this locus, is developmentally regulated in the kidney and encodes a putative transcription factor that has been shown to be mutated in Wilms tumor specimens. We have suggested that one such altered product of the WT1 gene may be capable of trans-dominant suppression, since the mutated allele was found to be coexpressed with the wild-type allele in a sporadic Wilms tumor. We therefore tested the ability of this mutant WT1 allele, containing an in-frame deletion within the DNA-binding domain, to transform primary baby rat kidney cells. The mutant WT1 gene was found to cooperate with the adenoviral E1A gene in transforming baby rat kidney cells, as demonstrated by growth in soft agar and tumorigenicity in nude mice. The wild-type WT1 gene in all of its alternatively spliced forms neither suppressed E1A-induced focus formation nor cooperated with E1A. Our results indicate that impairment of DNA binding of the WT1 tumor-suppressor gene product can result in a dominant negative mutation.