The production of transcription factor isoforms by developmentally regulated alternative splicing of pre-mRNAs is a widespread phenomenon. Frequently, differences in biochemical function among the isoforms can be predicted from sequence analysis, and in many instances such differences have been demonstrated in vitro or in cultured cells. A great variety of strategies for functional diversification can be classified into three main types: modulation of DNA binding specificity or affinity, production of activators and antagonists from the same gene, and modulation of dimerization properties. Despite obvious implications in many cases, the actual developmental consequences are understood only in a few instances. The roles inferred from these examples are diverse, ranging from developmental switches that have profound effects on pathways of differentiation to mechanisms that may optimize or fine-tune transcription factor function in different contexts.