WT1 encodes a zinc finger protein with a key role in urogenital development that is inactivated in a subset of Wilms' tumors. This tumor suppressor gene product contains an amino-terminal dimerization domain required for trans-inhibition of wild-type WT1 activity by mutants defective for DNA binding. In the course of characterizing truncation mutants of WT1, we noted that the WT1 zinc fingers contain two functionally independent targeting signals required for nuclear localization of the protein. These novel signals lie within zinc fingers I and within zinc fingers II and III. We demonstrate that nuclear targeting of the WT1 homodimerization domain functionally antagonizes activity of the wild-type protein activity.