We report a soluble isoform of mouse Fas, which is generated by alternative splicing of Fas mRNA to a newly identified exon located between exons 2 and 3 of the previously published Fas sequence. This splicing event creates a novel Fas transcript, Fas beta, with the potential to encode a truncated form of the extracellular domain, termed Fas B. In vitro, P815 mastocytoma cells transfected with Fas B become resistant to Fas ligand-induced apoptosis, and the resistance is mediated by a secreted product of the transfected cells. In vivo, Fas beta mRNA expression is correlated inversely with apoptosis among subsets of intrahepatic T lymphocytes, a cell population in which activation-induced T cell apoptosis occurs. We propose that Fas B is a new cytokine that acts physiologically to limit apoptosis induced by Fas ligand.