The avian acute leukemia virus (E26) induces a mixed erythroidmyeloid leukemia in chickens and carries two distinct oncogenes, v-myb and v-ets. The viral protein responsible for transformation is a gag-myb-ets fusion protein that is located in the nucleus of the transformed cells. The cellular homologue of v-ets (c-ets-1) is highly expressed in lymphoid cells and differs from the v-ets gene at its carboxy terminal region. Here, we show that both the c-ets-1 and v-ets gene products are DNA-binding proteins and their DNA-binding activity is located in the carboxy terminal (46 amino acid residues) region. It appears that this DNA-binding activity is modulated by the extreme carboxy terminal region. The amino acid sequences of the putative ets DNA-binding domain at its carboxy terminal region showed a helix-turn-helix secondary structure. Exchanging the nonhomologous extreme carboxy terminal regions of c-ets-1 with v-ets gene sequences showed differences in DNA-binding affinity, indicating that these differences may be partly responsible for the activation of the ets oncogene.