The retroviral oncogene v-jun and its cellular counterpart code for proteins that function as major components of the transcription factor complex AP-1. Jun proteins bind to the AP-1 consensus sequence as homodimers or heterodimers with members of the Fos protein family. This report compares the ability of viral and cellular Jun proteins (v-Jun and c-Jun) to activate transcription and to stimulate DNA synthesis. The effect of amino acid substitutions on cellular transformation is also described. In F9 cells c-Jun is a more effective transactivator than v-Jun, which carries two amino acid substitutions in the carboxy-terminal region that together down-regulate transactivation. The delta deletion, present in the amino-terminal region of v-Jun, does not affect transactivation in F9 cells; however, it does modulate the stimulation of DNA synthesis. When delta is deleted, the amino acid substitutions are without consequence on DNA synthesis. In the presence of delta the amino acid substitutions down-regulate DNA synthesis. Deletion of the Jun transactivation domain, which is required for cellular transformation, abolishes both transactivation and stimulation of DNA synthesis. We conclude that transformation, transactivation and stimulation of DNA synthesis all depend on the presence of the transactivation domain. The three functions are, however, not tightly correlated, and further work is needed to define the role of the biochemical activities of Jun in oncogenesis.