Homeodomain-containing proteins regulate, as transcription factors, the coordinated expression of genes involved in development, differentiation, and malignant transformation. We report here the molecular cloning of a mutated HOXB7 transcript encoding a truncated homeodomain-containing protein in MCF7 cells. This is a new example of mutation affecting the coding region of a HOX gene. In addition, we detected two HOXB7 transcripts in several breast cell lines and demonstrated that both normal and mutated alleles were expressed at the RNA level in MCF7 cells as well as in a variety of breast tissues and lymphocytes, suggesting that a truncated HOXB7 protein might be expressed in vivo. Using transient co-transfection experiments, we demonstrated that both HOXB7 proteins can activate transcription from a consensus HOX binding sequence in breast cancer cells. Our results provide evidence that HOXB7 protein has transcription factor activity in vivo and that the two last amino acids do not contribute to this property.