The Wilms' tumor suppressor gene WT1 encodes a zinc finger transcription factor, whose expression inhibits the growth of the RM1 Wilms' tumor cell line. Transient transfection of WT1 constructs into 3T3 or 293 cells results in transcriptional repression of a number of cotransfected promoters containing the early growth response gene 1 consensus sequence. We now show that WT1 has properties of a transcriptional activator in RM1 cells, an effect that may be associated with the presence of a mutated p53 gene in these cells. Stable transfection of wild-type WT1 into RM1 cells results in induction of endogenous insulin-like growth factor 2 (IGF2) but not of other previously postulated WT1-target genes. The induction of IGF2 is dramatically enhanced by WT1 mutants encoding an altered transactivation domain. We conclude that IGF2 is a potentially physiological target gene for WT1 and that its induction may contribute to the growth-stimulating effects of WT1 variants.