ATF3 is a member of the mammalian activating transcription factor/cAMP responsive element binding protein (ATF/CREB) family of transcription factors. In this report, we demonstrate that, contrary to the implication of its name, ATF3 represses rather than activates transcription from promoters with ATF sites. We also present evidence suggesting that one possible mechanism by which ATF3 represses transcription is to stabilize inhibitory co-factors at the promoter. In addition, we describe a naturally occurring, alternatively spliced, form of ATF3: ATF3 delta Zip. ATF3 delta Zip lacks the leucine zipper domain and does not bind to DNA. In contrast to ATF3, ATF3 delta Zip stimulates transcription, presumably by sequestering inhibitory co-factors away from the promoter. It is possible that ATF3 delta Zip is a physiologically important regulator and that it, together with ATF3, regulates the expression of specific target genes.