In independently derived drug-resistant sublines of the mouse lymphoid tumor P388, multidrug resistance is associated with the exclusive overexpression of the mdr3 gene. In P388/VCR cells, mdr3 overexpression occurs in the absence of gene amplification, while in P388/ADM-2 cells overexpression is associated with mdr3 gene amplification. The mechanism underlying mdr3 overexpression in these cells was investigated. Measurement of the rate of transcription by nuclear "run-on" assays showed that increased mdr3 expression in P388/VCR cells was caused by transcriptional activation of the gene. Analysis of the 5' end of mdr3 mRNA transcripts by primer extension indicated that in P388/VCR cells, these mRNAs extended approximately 200 nucleotides upstream exon 2, about 60 nucleotides longer than their counterparts expressed in normal tissues from the known transcription start site of the gene (TS1). Northern blotting experiments using discrete exon and intron probes derived from the 5' end of the gene near TS1, together with ribonuclease protection using a complementary RNA probe from the same region, demonstrated that transcriptional activation in P388/VCR cells occurred from a novel transcription start site named TS3, located either upstream of TS1 or within intron 1 at a site immediately upstream a novel exon. In P388/ADM-2 cells, Northern blotting and ribonuclease protection identified overexpressed mdr3 mRNAs initiating near TS1 and a large partially spliced mdr3 mRNA species initiating upstream of TS1 at a novel initiation site designated TS2. Therefore, mdr3 overexpression in independently derived multidrug-resistant isolates of P388 cells is associated with the appearance of novel transcription start sites in the gene and novel sequences at the 5' end of the overexpressed mRNAs.