The HER2 proto-oncogene (also known as neu or c-erbB-2) belongs to the epidermal growth factor receptor family. HER2 is frequently amplified in human carcinomas. Gene amplification or overexpression of HER2 has been correlated with poor prognosis in several human cancers. Point mutation in the rat HER2 homolog, neu, is involved in the formation of rat neuroblastomas. However, no similar mutation in HER2 has been found in human cancers. Here we report the identification of a novel alternative splicing form of HER2 (deltaHER2) in human cell lines. An exon 16 amino acids long in the extracellular domain was deleted in deltaHER2. Deletion mutations in the corresponding region were shown previously to be involved in the formation of mammary carcinomas in transgenic mice. In the focus-formation assay, deltaHER2 showed much stronger transformation activity than did wild-type HER2. This result suggests that the deleted 16-amino acid exon may play a regulatory role in HER2 transformation activity.