Proto-oncogene fos encodes a nuclear phosphoprotein of 380 amino acids that can modulate the transcription of other genes either by transactivation or by transrepression. The v-Fos protein (381 amino acids) shares the first 332 amino acids with the c-Fos protein (with five single amino-acid changes), but differs at the C terminus. We have previously reported that the c-Fos protein undergoes more extensive post-translational modification than v-Fos (refs 9, 10). The major modification of the c-Fos protein involves serine phosphoesterification of sites in the extreme C terminus. We therefore argued that modification of the C-terminal region of the c-Fos protein may be involved in its ability to transrepress transcription without compromising its ability to transactivate other genes. Here we show that mutant c-Fos protein which is hypophosphorylated at its C terminus is unable to repress transcription of the c-fos promoter following induction with serum or tetraphorbol acetate. The C-terminal phosphorylation-deficient mutant is, however, fully competent to activate transcription of promoters containing a phorbol response element. The requirement for phosphorylation can be offset by the introduction of a net negative charge in the C terminus of the Fos protein.