The expression of the high mobility group I (HMGI)-C chromatin component was shown previously to be essential for the establishment of the neoplastic phenotype in retrovirally transformed thyroid cell lines. To identify possible targets of the HMGI-C gene product, we have analyzed the AP-1 complex in normal, fully transformed and antisense HMGI-C-expressing rat thyroid cells. We show that neoplastic transformation is associated with a drastic increase in AP-1 activity, which reflects multiple compositional changes. The strongest effect is represented by the dramatic junB and fra-1 gene induction, which is prevented in cell lines expressing the antisense HMGI-C. These results indicate that the HMGI-C gene product is essential for the junB and fra-1 transcriptional induction associated with neoplastic transformation. The inhibition of Fra-1 protein synthesis by stable transfection with a fra-1 antisense RNA vector significantly reduces the malignant phenotype of the transformed thyroid cells, indicating a pivotal role for the fra-1 gene product in the process of cellular transformation.