Expansion of the FRAXE CCG repeat to a full mutation is associated with methylation and transcriptional silencing of the FMR2 gene, and as a consequence, mild-to-borderline mental retardation. FMR2 is a member of a family of four proteins, AF4, LAF4, FMR2, and AF5q31. The proteins associated with this family localize to the cell nucleus. Various regions of FMR2, and each of the other members of the protein family, were cloned and analyzed for transcription activation in yeast and mammalian cells. In both yeast and mammalian cells, FMR2 showed strong transcription activation. AF4 activation potential was several-fold lower. Interestingly, isoforms of both FMR2 and LAF4 lacking exon 3 activated transcription better than the larger isoforms containing exon 3. Compared with the other members of the family, activation by FMR2 was the strongest. Our results show that FMR2 is a potent transcription activator and that its function is conserved. Elucidation of the function of the FMR2 protein as a transcription activator may place FMR2 within the molecular signalling pathways involved in nonspecific X-linked mental retardation (MRX).