We report here the isolation of Tel-2, a novel member of the Ets transcription factor family, with high homology to Tel/ETV-6. Tel-2 is the second mammalian member of the Tel Ets family subclass whose prototype Tel is involved in various chromosomal translocations in human cancers. Six differentially expressed alternative splice products of Tel-2 were characterized encoding different Tel-2 isoforms which either contain or lack the amino-terminal Pointed domain and also vary at the carboxyl terminus. In contrast to Tel, which is highly expressed in several different cell types and tissues, Tel-2 is only weakly expressed in a variety of tissues and cell types, including placenta, prostate, spleen, liver, and lung. Tel-2 binds to functionally relevant Ets-binding sites of several genes and only the Tel-2 isoform containing the Pointed domain and the DNA-binding domain acts as a strong repressor of transcription. The retinoic acid receptor alpha and bone morphogenetic protein-6B (BMP-6) genes are specifically repressed by Tel-2 indicating a function for Tel-2 as an inhibitor of differentiation. Due to the important involvement of Tel in human cancer and the location of Tel-2 within the MHC cluster region, Tel-2 might be involved in chromosomal translocations in human cancer as well.