CDC25B2, a protein tyrosine phosphatase closely related to the putative CDC25B oncogene, was identified in a Burkitt lymphoma cDNA library. CDC25B2 differs from CDC25B by a 14 residue insertion and a 41 residue deletion, which are both located in the amino-terminal region of the protein, upstream of the catalytic domain. Examination of the genomic sequence revealed that CDC25B1 (formerly B) and CDC25B2 are splice variants of the same gene. A third variant, CDC25B3, that carries both the 14 and the 41 residue sequences was also identified in the same cDNA library. All three variants were detected in a panel of human primary culture and cell lines, although at different levels. In primary fibroblasts and in HeLa cells the CDC25B expression is cell cycle regulated, reaching a maximum in G2-phase. In vitro, CDC25B1 phosphatase is slightly more active than CDC25B2 and B3. However, episomal overexpression of the three CDC25B variants in fission yeast reveals that in vivo, CDC25B2 is largely more active than either B1 or B3 (B2>B3>B1) both to complement a thermosensitive S pombe CDC25 activity and to act as a mitotic inducer. Alternative splicing of CDC25B may therefore contribute to the control of cell proliferation.