The sterol carrier protein SCP-x/pro-SCP-2 gene is a fusion gene having two initiation sites that generate a long (SCP-x; 58.9-kDa) and a short (pro-SCP-2; 15.4-kDa) product, both containing the common SCP-2 module at the C terminus. Here, we show that SCP-x is processed on the peroxisomal surface to liberate a short C-terminal product of 12.9 kDa. This fragment has DNA binding activity in vivo and in vitro, as assessed by chromatin immunoprecipitation analysis, DNA-protein pull-down, electrophoretic mobility shift assay, and luciferase reporter activity. In addition, it is preferentially found in the nucleus where it regulates the transcription of CD147, the regulatory subunit of the Alzheimer disease gamma-secretase. Overexpression of SCP-x increased, whereas antisense oligonucleotides against scp-x decreased, the generation of the above transcription factor. Both biochemical and genetic approaches indicate that pro-SCP-2 acts as a competitive inhibitor of SCP-x processing, thereby controlling the release of the 12.9-kDa transcriptionally active fragment. The transcription regulatory function of pro-SCP-2 requires a peroxisomal targeting sequence at the C terminus and a 20-amino acid leading sequence at the N terminus. Finally, pro-SCP-2 has also cholesterol carrier activity, which is functionally separated from the transcription regulatory one. In conclusion, we have identified two novel functions (transcriptional and transcription regulatory) of the SCP-x/pro-SCP-2 gene that have impact on gamma-secretase activity.