The giant member of the protocadherin family, hFat1, is of pivotal importance during embryonal and fetal development of various organs including frontal brain and is essential in podocyte formation of renal glomeruli. The transmembrane form of the protein is located at lamellipodial edges and filopodial tips of cultured cells and its involvement in the regulation of actin cyto-skeleton dynamics by interacting with mammalian Ena/Vasp proteins has been reported (Review: Tanoue & Takeichi (2005) J. Cell Sci. 118, 2347). In HEK293 cells we have expressed a transmembrane construct of hFat1 comprising the extracellular EGF-like domains and the intracellular domain. The localization pattern of the construct agrees with that of endogenous hFat1. However, our data also suggest that the transmembrane form of hFat1 undergoes a regulated two step proteolytic process that occurs spontaneously in some cell lines. The extracellular domain is cleaved in the first step which must precede the release of the intracellular domain. The intracellular domain is predominantly translocated to the nucleus due to the unmasking of a N-terminal nuclear localisation sequence. Reporter assays demonstrate that nuclear hFat1 affects transcription supposedly by epigenetic mechanisms.