Multiple forms of the transcriptional regulator CCAAT/enhancer-binding protein beta (C/EBPbeta) with molecular masses of approximately 38, 34, 20, and 14 kDa have been observed in cell extracts. It has been proposed that these proteins arise by alternative initiation at in-frame AUG codons. The truncated C/EBPbeta isoforms (p14 and p20/LIP) lack transactivation domains but retain DNA-binding and dimerization sequences and are therefore assumed to function as competitive inhibitors of C/EBP-mediated transcription in vivo. By comparing various extraction procedures to analyze endogenous and overexpressed C/EBPbeta proteins, we determined that p20-C/EBPbeta is generated predominantly by in vitro proteolytic cleavage during isolation from cells and that p14-C/EBPbeta is produced exclusively by this mechanism. In transfected cells, the full-length (p34 and p38) isoforms but not the truncated proteins were detectable in the cytoplasm, indicating that the latter are not primary translation products. In addition, the C/EBPbeta leucine zipper dimerization domain was essential for the appearance of the truncated species, demonstrating that protein folding or dimerization are critical determinants of proteolytic sensitivity. Our findings suggest that the presence of truncated C/EBPbeta proteins in cell extracts must be interpreted with caution and that assumptions about the in vivo relevance of these isoforms should be re-evaluated.