Normal and transformed human cells when stained for ezrin, an F-actin-binding ERM (ezrin/radixin/moesin) family protein, revealed a faint and intense immunofluorescence, respectively. Surprisingly, nuclear staining that was assigned to the nucleolus by confocal laser and immunoelectron microscopy was detected in both cell types and was more prominent in normal cells due to the absence of glistering cytoplasmic fluorescence. By Western analysis the nuclear fraction was seen to have a 55-kDa ezrin-reactive protein that did not react to the antibodies raised against the C-terminus of the protein, suggesting that it may correspond to an endogenously cleaved N-terminus of the protein. Transfections of cells with a cDNA encoding full-length ezrin tagged with green fluorescent protein (GFP) at its N-terminus indeed resulted in two GFP-tagged products corresponding to full-length and 55-kDa endogenously cleaved forms. Transfection with a cDNA encoding approximately 55 kDa of the ezrin N-terminus (N-ezrin) showed that it can translocate to the nucleus. N-ezrin transfected cells exhibited irregular cell edges and collapse of actin fibers. Similar changes were seen following microinjection of anti-p81/ezrin antibody, suggesting that N-ezrin may function as a dominant negative competitor of ezrin. These data demonstrate the existence of an N-terminal cleavage form of ezrin that localizes to the nucleolus and that its overexpression induces cytoskeletal changes.