We have previously described a dominant-negative mutant of cJun that lacks the transactivation domain (TAD) of cJun and prevents AP-1-mediated transcriptional activation by quenching endogenous Jun or Fos proteins. We now report the development of a panel of cJun mutants that have inactivating mutations in the TAD, DNA-binding domain (DBD), or leucine zipper domain. These mutants are all unable to activate transcription, but only TAD and DBD mutants function in a dominant-negative fashion by inhibiting both cJun- induced transcriptional activation and transformation induced by the tumor promoter 12-O-tetradecanoylphorbol-13-acetate in ras-transfected rat embryo cells. Although the TAD and DBD mutants both function as transdominant inhibitors, they work through different mechanisms and with different inhibitory potencies. The DBD mutants, which function by inhibiting DNA binding, are relatively weak inhibitors, whereas the TAD mutants inhibit by quenching and are much more potent. Dimerization assays demonstrate that mutations in the DBD decrease the dimerization affinity of these mutants with cJun. These results demonstrate that the most potent dominant-negative mutants of cJun are proteins that have intact DBDs and quench the activity of the endogenous transcription factors.