The Wilms' tumor 1 (WT1) gene is believed to act as a canonical tumor suppressor. However, it has also been reported to function as an oncogene. Germline WT1 deletion is associated with Wilms' tumor, and exogenous WT1 cDNA introduction into cells induces the transcriptional suppression of its oncogenic target genes. In contrast, high WT1 expression is associated with poor prognosis in patients with various cancers. Why WT1 acts as a tumor suppressor under certain conditions but as an oncogene under other conditions is unknown. Here, we report that CUG initiation site for WT1 protein synthesis (CUG)-translated WT1 (cugWT1), an N-terminally extended form of canonical AUG initiation site for WT1 protein synthesis (AUG)-translated WT1 (augWT1), was overexpressed in most cancer cell lines and cancer tissues and functioned as an oncogene, whereas the classical augWT1 acted as a tumor suppressor as reported previously and inhibited the function of cugWT1. Translation of cugWT1 is initiated from a CUG codon upstream and in-frame with the coding region of augWT1. cugWT1 induced cell transformation and increased the gene expression of c-myc, bcl-2 and egfr, whereas overexpression of augWT1 repressed colony formation of cancer cells and inhibited the expression of the same target genes by recruiting histone deacetylase 1 (HDAC1). In addition, we found that protein kinase B (AKT)-phosphorylated cugWT1 on Ser62 and protected cugWT1 from proteasomal degradation induced by the F-box/WD repeat-containing protein 8 (FBXW8). These results provide an important breakthrough in the field of cancer biology and contribute significantly to the resolution of the chameleon function of WT1.