The avian acute leukemia virus E26 induces a mixed erythroid-myeloid leukemia in chickens and carries two distinct oncogenes, v-myb and v-ets. Recently, a novel gene named erg, closely related to the v-ets oncogene, was identified in human COLO 320 cells and the nucleotide sequence of its approximately 5.0-kilobase transcript, erg 1 was determined. In the present study, the nucleotide sequence of the alternatively spliced transcript, erg 2, was found to differ from erg 1 by a splicing event that causes a coding frameshift near the amino terminus, resulting in an additional 99-amino acid insertion at the amino-terminus. Expression of complementary DNAs for the two transcripts in vitro resulted in synthesis of polypeptides of approximately 41 and 52 kilodaltons, suggesting the use of alternative translation initiation codons in the case of erg proteins. The erg gene was localized by somatic cell genetic analysis to human chromosome 21. It is proposed that alternative sites of splicing and polyadenylation, together with alternative sites of translation initiation, allow the synthesis of two related polypeptides from a single erg gene transcriptional unit.