Tissue-type transglutaminases (TGases) were recently shown to exert dual enzymatic activities; they catalyze the posttranslational modification of proteins by transamidation, and they also act as guanosine triphosphatase (GTPase). Here we show that a tissue-type TGase is expressed in rat brain astrocytes in vitro, and is induced by the inflammation-associated cytokines interleukin-1beta and to a lesser extent by tumor necrosis factor-alpha. Induction is accompanied by overexpression and appearance of an additional shorter clone, which does not contain the long 3'-untranslated region and encodes for a novel TGase enzyme whose C terminus lacks a site that affects the enzyme's interaction with guanosine triphosphate (GTP). Expression of two clones revealed that the long form is inhibited noncompetitively by GTP, but the short form significantly less so. The different affinities for GTP may account for the difference in physiological function between these two enzymes.