Oct-2, a transcription factor expressed in the B lymphocyte lineage and in the developing CNS, functions through of a number of discrete protein domains. These include a DNA-binding POU homeodomain flanked by two transcriptional activation domains. In vitro studies have shown that the C-terminal activation domain, a serine-, threonine- and proline-rich sequence, possesses unique qualities, including the ability to activate transcription from a distance in a B cell-specific manner. In this study, we describe mice in which the endogenous oct-2 gene has been modified through gene targeting to create a mutated allele, oct-2DeltaC, which encodes Oct-2 protein isoforms that lack all sequence C-terminal to the DNA-binding domain. Surprisingly, despite the retention of the DNA-binding domain and the glutamine-rich N-terminal activation domain, the truncated protein(s) encoded by the oct-2DeltaC allele are unable to rescue any of the previously described defects exhibited by oct-2 null mice. Homozygous oct-2DeltaC/DeltaC mice die shortly after birth, and B cell maturation, B-1 cell self renewal, serum Ig levels, and B lymphocyte responses to in vitro stimulation are all reduced or absent, to a degree equivalent to that seen in oct-2 null mice. We conclude that the C-terminal activation domain of Oct-2 is required to mediate the unique and indispensable functions of the Oct-2 transcription factor in vivo.