The adipocyte enhancer-binding protein (AEBP1) is a transcriptional repressor with carboxypeptidase activity. AEBP1 expression is down-regulated during adipogenesis. Aortic carboxypeptidase-like protein (ACLP) is a non-nuclear isoform of AEBP1 that has an N-terminal extension of 380 amino acids. ACLP expression is up-regulated during vascular smooth muscle cell differentiation. To gain insight into the regulation of AEBP1 isoform expression, we have determined the structural organization of the mouse AEBP1 gene. This gene extends over 10 kb, has 21 exons, and gives rise to two mRNAs (AEBP1 and ACLP). The 9th intron is retained in the mature AEBP1 transcript. Thus, ACLP encodes an additional 380 amino acids N-terminal to the first ATG codon of AEBP1 which is located in exon 10. RT-PCR experiments showed that both transcripts are expressed ubiquitously in all mouse tissues examined, while Western blot analysis suggested that expression is translationally regulated. Our results provide evidence that two isoforms of AEBP1 with very different functions are produced by an alternative splicing mechanism. This represents a new example of regulation of subcellular localization by protein truncation.