The Musashi family of RNA binding proteins act to promote stem cell self-renewal and oppose cell differentiation predominantly through translational repression of mRNAs encoding pro-differentiation factors and inhibitors of cell cycle progression. During tissue development and repair however, Musashi repressor function must be dynamically regulated to allow cell cycle exit and differentiation. The mechanism by which Musashi repressor function is attenuated has not been fully established. Our prior work indicated that the Musashi1 isoform undergoes site-specific regulatory phosphorylation. Here, we demonstrate that the canonical Musashi2 isoform is subject to similar regulated site-specific phosphorylation, converting Musashi2 from a repressor to an activator of target mRNA translation. We have also characterized a novel alternatively spliced, truncated isoform of human Musashi2 (variant 2) that lacks the sites of regulatory phosphorylation and fails to promote translation of target mRNAs. Consistent with a role in opposing cell cycle exit and differentiation, upregulation of Musashi2 variant 2 was observed in a number of cancers and overexpression of the Musashi2 variant 2 isoform promoted cell transformation. These findings indicate that alternately spliced isoforms of the Musashi protein family possess distinct functional and regulatory properties and suggest that differential expression of Musashi isoforms may influence cell fate decisions.