Mutation of the von Hippel-Lindau tumor suppressor gene (vhl) causes the von Hippel-Lindau cancer syndrome as well as sporadic renal clear cell carcinoma. To pursue our study of the intracellular localization of VHL protein in relation to its function, we fused VHL to the green fluorescent protein (GFP) to produce the VHL-GFP fusion protein. Like VHL, VHL-GFP binds to elongins B and C and Cullin-2 and regulates target gene product levels, including levels of vascular endothelial growth factor and glucose transporter 1. VHL-GFP localizes predominantly to the cytoplasm, with some detectable nuclear signal. Inhibition of transcription by actinomycin D or 5,6-dichlorobenzimidazole riboside (DRB) causes VHL to be redistributed to the nucleus. A cellular fusion assay was used to demonstrate that inhibition of transcription induces a decrease in the nuclear export rate of VHL. The dependence of transcription for trafficking is lost with a deletion of exon 2, a region with a mutation causing a splice defect in the VHL gene in sporadic renal clear cell carcinoma. Addition of a strong nuclear export signal (NES) derived from the Rev protein results in complete nuclear exclusion and abrogates the redistribution of VHL-GFP-NES into the nucleus upon inhibition of transcription. Leptomycin B, which inhibits NES-mediated nuclear export, reverts the distribution of VHL-GFP-NES to that of VHL-GFP and restores sensitivity to actinomycin D and DRB. Uncoupling of VHL-GFP trafficking to transcription either by an exon 2 deletion or fusion to NES abolishes VHL function. We suggest that VHL function requires not only nuclear or cytoplasmic localization, but also exon 2-mediated transcription-dependent trafficking between these two cellular compartments.