c-Myc plays a part in the regulation of important cellular processes such as growth, differentiation and neoplastic transformation. Although c-myc gene structure and expression are well characterized, the function and biochemical properties of the protein are less well understood. Human c-myc is a 439-amino acid phosphoprotein which binds DNA in vitro and belongs to a discrete subset of nuclear proteins. Using the human c-myc mutants generated by linker-insertion and deletion mutagenesis, we have defined regions of the protein that are important for its transforming activities and its nuclear localization. Here, we show that human c-myc exists as an oligomer in vitro and use mutant proteins to localize the oligomerization domain to a carboxyl-terminal peptide containing the 'leucine zipper' motif. The 'leucine zipper' describes a structure found in a number of DNA-binding proteins that contains leucines occurring at intervals of every seventh amino acid in a region predicted to be alpha-helical. The 'leucine zipper' might mediate dimerization by intermolecular interdigitation of the leucine side-chains. We show that a c-myc mutant, which is inactive but can oligomerize, dominantly inhibits the cotransforming activity with wild-type c-myc of rat embryo cells, whereas inactive mutants which cannot oligomerize properly because of deletions in the oligomerization domain are recessive.