The Epstein-Barr virus (EBV) encoded latent membrane protein, LMP1, is oncogenic in rodent fibroblasts and is an essential effector protein in EBV-induced growth-transformation of human B lymphocytes. Previous structure-function studies with LMP1 have relied largely on rodent fibroblast transformation as a functional readout, with apparently conflicting results. We have now analysed several LMP1 mutants in various human cell types, including B cells, T cells and epithelial cells, using two independent functional assays; (i) activation of NF-kappa B, and (ii) induction of two cell surface activation markers, CD54 and CD40. The results suggest that the cytosolic N-terminus is not essential for LMP1 function in any cell type studied. The third and fourth transmembrane helices and the intracytosolic loops are dispensable for activation of NF-kappa B, but they do influence the induction of CD54 and CD40. The major effector domain appears to be the cytosolic C-terminus in which were identified two 'C-terminal activating regions', CTAR-1 (residues 194-232) and CTAR-2 (residues 351-386). Whilst the exact results depended upon the host cell line, CTAR-2 was generally more important for activation of NF-kappa B, and both CTAR-1 and CTAR-2 were required for optimal induction of CD54 and CD40. Analysis of NF-kappa B activation by LMP1 in Rat-1 fibroblasts indicated that many mutations that were functional in human cells were poorly tolerated in the rodent cells; a result that is in broad agreement with published Rat-1 transformation data.