TLS, the product of a gene commonly translocated in liposarcomas (TLS), is prototypical of a newly identified class of nuclear proteins that contain a C-terminal domain with a distinct RNA recognition motif (RRM) surrounded by Arg-Gly-Gly (RGG) repeats. Its unique N terminus serves as an essential transforming domain for a number of fusion oncoproteins in human sarcomas and leukemias. In this study we use an in vivo UV crosslinking procedure to probe the interactions of TLS with RNA. TLS is found to bind RNA in vivo and the association of TLS with RNA is rapidly diminished by treating cells with transcriptional inhibitors. This suggests that the species bound by TLS turns over rapidly. Surprisingly, the RRM was found to be dispensable for RNA binding by TLS in vivo, suggesting that at any one time most of the interactions between TLS and RNA in the cell are not sequence specific. Analysis of inter specific heterokaryons formed between human and mouse or Xenopus cells revealed that TLS engages in rapid nucleocytoplasmic shuttling, a finding confirmed by the ability of anti-TLS antibodies to trap TLS when injected into the cytoplasm of HeLa cells. Cellular fractionation experiments suggest that TLS binds to RNA in both the nucleus and cytoplasm and support the hypothesis that TLS functions as a heterogeneous ribonuclear protein (hnRNP)-like chaperone of RNA. These findings are discussed in the context of the role altered forms of TLS play in cellular transformation.