The golli products of the myelin basic protein (MBP) gene are expressed in neurons and oligodendrocytes (OLs). In certain neuronal populations, golli proteins undergo translocation between the nucleus and cytoplasm/processes during development. The proteins consist of two domains, a golli domain of 133 amino acids and an MBP domain of variable length. One objective of this study was to identify the sequences responsible for nuclear targeting. Site-directed mutagenesis and deletion analyses were used to generate a series of golli-green fluorescent protein (GFP) DNA constructs that were transfected into OL and neuronal cell lines to follow localization by confocal microscopy. The results indicated that a 36-residue stretch in the MBP domain is essential for nuclear targeting, and the sequence appears to be a nontraditional localization signal motif. The studies also revealed that overexpression of golli proteins could induce dramatic changes in cell morphology. In OL lines, overexpression of intact golli proteins, or golli peptide alone, caused an increase in the length and number of processes, and the elaboration of membrane sheets. In the neuronal lines, there was a dramatic increase in number and length of extensions. The results, consistent with the timing of golli expression in cells during neural development, suggest that golli proteins may be involved in process formation/extension in OLs and neurons during development. These studies have defined two functional domains in the golli protein. Sequences in the MBP domain target the protein into the nucleus and sequences within the golli domain induce process sheet extension in OLs and neurons. © 2002 Wiley-Liss, Inc.