The Drosophila protein Groucho is involved in embryonic segmentation and neural development, and is implicated in the Notch signal transduction pathway. We are investigating the molecular mechanisms underlying the function of Groucho and of its mammalian homologues, the TLE ('transducin-like Enhancer of split') proteins. We show that Groucho/TLE1 proteins are phosphorylated. We also show that two populations of phosphorylated Groucho proteins can be identified based on their interaction with the nuclear compartment. More slowly migrating proteins with an apparent molecular mass of roughly 110 kDa interact strongly with the nuclei, while faster migrating proteins displaying molecular masses roughly 84-85 kDa show lower affinity for the nuclear compartment. Similarly, TLE1 proteins with an apparent molecular mass of roughly 118 kDa exhibit higher affinity for the nuclear compartment than do faster migrating forms with apparent molecular masses of 90-93 kDa. Moreover, we show that the nuclear, more slowly migrating, TLE1 proteins are induced during neural determination of P19 embryonic carcinoma cells. These results implicate phosphorylation in the activity of Groucho/TLE1 proteins and suggest that phosphorylated forms of higher molecular mass are involved in nuclear functions. Finally, we show that different TLE proteins respond in different ways to the neural commitment of P19 cells, suggesting that individual members of this protein family may have non-redundant functions.