The different isoforms of the uncoupling protein-3 (UCP3) are expressed in skeletal muscle and are up-regulated by splicing factors. Here, we report that UCP3 alternative splicing (alternative polyadenylation) is regulated by cooperation between the splicing factor ASF/SF2 and the transcription factor PPAR-gamma. We found that ASF/SF2 activates formation of long-form UCP3 (UCP3(L)) by inhibiting a cleavage and polyadenylation signal (AATAAA) located in its final intron that prematurely terminates message elongation. PPAR-gamma activates this process by directly interacting with ASF/SF2, providing the first example of a direct link between a transcription factor and alternative splicing. Activation of ASF/SF2 promotes formation of UCP3(L), whereas loss of ASF/SF2 decreases production of both UCP3(L) and short-form UCP3 (UCP3(S)). We suggest that the relative abundance of ASF/SF2 and PPAR-gamma determines the ratio of UCP3 isoforms. (C) 2008 Elsevier Inc. All rights reserved.