We recently reported that the putative tumor suppressor gene product WT1 interacts with a 5'-flanking DNA sequence 5'-GCGGGGGCG-3' within the platelet-derived growth factor A-chain gene and abolishes its promoter activity, suggesting that WT1 functions as a transcriptional suppressor of the platelet-derived growth factor A-chain gene. We now show that WT1 functions also as a transcriptional activator. Using chimeric reporter plasmids, we demonstrated that WT1 requires both 5' and 3' binding sites relative to transcription start site for transcriptional repression; however, when WT1 binds to either the 5' or the 3' site alone, WT1 functions to activate transcription. We truncated the wt1 gene and established that amino acid residues 84-179 are required for transcriptional suppression, whereas amino acid residues 180-294 contain a domain that mediates transcriptional activation. These results establish that WT1 has regulatory domains that function either to activate or suppress transcription and suggest the possibility that WT1 functions as an activator and not as a suppressor of selected gene transcription.