The murine mortalin genes, mot-1 and mot-2, are members of the hsp70 family of proteins and differ from each other by only two amino acid residues. Mot-1 is expressed in normal cells and has pancytosolic cellular distribution whereas mot-2 is found in the perinuclear region of immortal cells. We report here that a high level of expression of mot-2 protein resulted in malignant transformation of cells as analysed by anchorage independent growth and nude mice assays. A high level of protein expression is attributed to the 900 bp 3' untranslated region of the cDNA which does not have any transforming activity per se. Mortalin cDNA clones isolated from human transformed cells were also found to have transforming activity in similar assays and a high level of expression was apparent in some of the human immortalized cells that showed non-pancytosolic mortalin immunofluorescence. Taken together, the data suggest that nonpancytosolic mortalin may have a role in tumorigenesis.