The Wilms' tumor suppressor gene, wt1, encodes a zinc-finger transcription factor, WT1, that represses transcription of a number of growth-promoting genes and inhibits cell growth. The transcripts of wt1 undergo two alternative splicing events, giving rise to four isoforms of mRNA in constant ratios. The first alternative splice introduces an extra exon 5, which encodes 17 amino acid residues inserted between the transcription regulatory domain and the DNA binding domain of WT1. Previously, we demonstrated that the 17-amino acid domain functioned as a transcription repressor when it was fused with the DNA binding domain of WT1. We have now identified a point mutation within exon 5 of wt1 in a sporadic unilateral Wilms' tumor patient. The mutation changes the last of the 17 amino acids from asparagine to serine. The protein isoform of WT1 carrying this mutation exhibited a 2-3-fold lower transcription-repressing activity than wild-type WT1 in transient cotransfection assays. The mutation also decreased growth-inhibiting activity of WT1 in two osteosarcoma cell lines, U2OS and Saos-2. By diminishing transcription-repressing and growth-inhibiting activities of WT1, this naturally occurring mutation within exon 5 of wt1 may disturb the normal function of the protein and lead to the uncontrolled cell growth characteristic of Wilms' tumor.