The presumed open reading frame for mouse FGF3, starting at the most 5' AUG codon, predicts a hydrophobic N-terminus characteristic of a signal peptide for secretion. However, in reticulocyte lysates and transfected COS-1 cells, the full-length Fgf-3 cDNA is translated almost exclusively from an upstream CUG codon. The resultant products are distributed in both the nucleus and the secretory pathway, implying that the single CUG-initiated form of FGF3 has dual fates. By analysing a series of deletion and replacement mutants and by linking parts of FGF3 to a heterologous protein, we show that secretion is mediated by cleavage adjacent to the previously defined signal peptide, whereas nuclear localization is determined primarily by a classical but relatively weak bipartite motif. In the context of FGF3, nuclear localization also requires the N-terminal sequences which lie upstream of the signal peptide. Thus, the subcellular fate of FGF3 is determined by the competing effects of signals for secretion and nuclear localization within the same protein, rather than by alternative initiation or processing.