The t (11; 22)(p13; q12) translocation associated with desmosplastic small round cell tumor results in a chimeric molecule fusing the amino terminal domain (NTD) of the EWS1 gene to three of the four carboxy-terminal zinc fingers of the WT1 tumor suppressor gene. Since the DNA binding domains of WT1 and EWS/WT1 are structurally different, we have assessed the functional consequences of the EWS/WT1 fusion. We find that the EWS/WT1 protein has a higher binding affinity for a given recognition target than the WT1 product. This is unlike other fusion products involving translocation of the NTD of EWS to DNA binding domains in which DNA binding specificity and affinity is not changed. We demonstrate that EWS/WT1 is a nuclear protein and that the NTD of EWS contains (a) nuclear localization signal (s). We also find that the integrity of a domain within the WT1 zinc fingers, responsible for mediating interaction between WT1 and the transcriptional repressor par-4, is disrupted in the EWS/WT1 fusion product. Deletion analysis of the NTD of EWS indicated that integrity of the entire domain was necessary to achieve full transactivation potential.