The oncogene amplified in breast cancer 1 (AIB1) is a nuclear receptor coactivator that plays a major role in the progression of various cancers. We previously identified a splice variant of AIB1 called AIB1-Δ4 that is overexpressed in breast cancer. Using mass spectrometry, we define the translation initiation of AIB1-Δ4 at Met(224) of the full-length AIB1 sequence and have raised an antibody to a peptide representing the acetylated N terminus. We show that AIB1-Δ4 is predominantly localized in the cytoplasm, although leptomycin B nuclear export inhibition demonstrates that AIB1-Δ4 can enter and traffic through the nucleus. Our data indicate an import mechanism enhanced by other coactivators such as p300/CBP. We report that the endogenously and exogenously expressed AIB1-Δ4 is recruited as efficiently as full-length AIB1 to estrogen-response elements of genes, and it enhances estrogen-dependent transcription more effectively than AIB1. Expression of an N-terminal AIB1 protein fragment, which is lost in the AIB1-Δ4 isoform, potentiates AIB1 as a coactivator. This suggests a model whereby the transcriptional activity of AIB1 is squelched by a repressive mechanism utilizing the N-terminal domain and that the increased coactivator function of AIB1-Δ4 is due to the loss of this inhibitory domain. Finally, we show, using Scorpion primer technology, that AIB1-Δ4 expression is correlated with metastatic capability of human cancer cell lines.