Parafibromin is a tumor suppressor protein encoded by HRPT2, a gene recently implicated in the hereditary hyperparathyroidism-jaw tumor syndrome, parathyroid cancer, and a subset of kindreds with familial isolated hyperparathyroidism. Human parafibromin binds to RNA polymerase II as part of a PAF1 transcriptional regulatory complex. The mechanism by which loss of parafibromin function can lead to neoplastic transformation is poorly understood. Because the subcellular localization of parafibromin is likely to be critical for its function with the nuclear PAF1 complex, we sought to experimentally define the nuclear localization signal (NLS) of parafibromin and examine its potential role in parafibromin function. Using site-directed mutagenesis, we define a dominant bipartite NLS and a secondary NLS, both in the NH(2)-terminal region of parafibromin whose combined mutation nearly abolishes nuclear targeting. The NLS-mutant parafibromin is significantly impaired in its association with endogenous Paf1 and Leo1. We further report that overexpression of wild-type but not NLS-mutant parafibromin induces apoptosis in transfected cells. Inhibition of endogenous parafibromin expression by RNA interference inhibits the basal rate of apoptosis and apoptosis resulting from DNA damage induced by camptothecin, a topoisomerase I inhibitor. These experiments identify for the first time a proapoptotic activity of endogenous parafibromin likely to be important in its role as a tumor suppressor and show a functional role for the NLS of parafibromin in this activity.