p63 shares considerable sequence identity with p53, especially in its DNA-binding, activation and tetramerization domains. When the upstream promoter is used for p63 expression, three major transactivation p63 (TAp63) isoforms (alpha, beta and gamma) are produced. p63 is also expressed from an alternate promoter located in intron 3, producing three major DeltaNp63 isoforms. Recent studies demonstrated that p63 has the potential to function as a tumor suppressor or an oncoprotein. To further address this, we generated cell lines that inducibly express each TAp63 isoform. We showed that TAp63 isoforms are capable of inducing p53-responsive genes, inhibiting cell proliferation and promoting apoptosis. Interestingly, we discovered that both the activation domain (residues 1-59) and the proline-rich domain (residues 67-127) are required for TAp63 transcriptional activity. Likewise, TAp63beta(DeltaPRD), deleted of residues 60-133, possessed a greatly attenuated ability to induce endogenous target genes and promote apoptosis, but retained the ability to inhibit cell proliferation when expressed in stable, inducible cell lines. TAp63beta(DeltaPRD) also functioned as a dominant negative to wild-type p63beta in a dose-dependent manner. Furthermore, the loss of function seen with deletion of the proline-rich domain was not due to a DNA-binding defect, as TAp63beta(DeltaPRD) was found to strongly bind endogenous promoters using chromatin immunoprecipitation assay. Finally, mutational analysis revealed that a PXXP motif at residues 124-127 contributes to the transcriptional activity of TAp63. Altogether, our findings suggest that TAp63 transcriptional activity can be regulated by modification(s) of, or protein interactions with, the p63 proline-rich domain.