Our results demonstrate that murine paired domain-containing genes (Pax) can promote oncogenesis in tissue culture cells and in mice, and should thus be classified as a novel group of proto-oncogenes. The induction of tumor formation in mice was dependent on a functional paired domain, but did not require the presence of a homeodomain. Consequently, not only the Pax-3 and Pax-6 proteins, which in addition to paired domains contain intact homeodomains, but also Pax-2 and Pax-8, containing only residual homeodomains, and Pax-1, completely lacking a homeodomain, were able to induce transformation of cell cultures and tumor formation in mice. The oncogenic potential of the Pax proteins is dependent on the DNA binding function of the paired motif, as the Un-Pax-1 protein, which carries a point mutation in this domain that impairs DNA binding, is also defective in tumor formation. Therefore, the Pax gene products are not only involved in controlling embryogenesis, but they can, if deregulated, also induce tumorigenesis.