CDC25B phosphatases must activate cyclin B-CDK1 complexes to restart the cell cycle after an arrest in G2 phase caused by DNA damage. However, little is known about the precise mechanisms involved in this process, which may exert considerable impact on cancer susceptibility and therapeutic responses. Here we report the discovery of novel N-terminally truncated CDC25B isoforms, referred to as DN-CDC25B, with an exclusively nuclear and nonredundant function in cell cycle re-initiation after DNA damage. DN-CDC25B isoforms are expressed from a distinct promoter not involved in expression of canonical full-length isoforms. Remarkably, in contrast to the high lability and spatial dynamism of the full-length isoforms, DN-CDC25B isoforms are highly stable and exclusively nuclear, strongly suggesting the existence of two pools of CDC25B phosphatases in the cell that have functionally distinct properties. Using isoform-specific siRNA, we found that depleting full-length isoforms, but not DN-CDC25B isoforms, delays entry into mitosis. Thus, in an unperturbed cell cycle, the fulllength isoforms are exclusively responsible for activating cyclin B-CDK1. Strikingly, in the late response to DNA damage, we found a CHK1-dependent shift in accumulation of CDC25B isoforms toward the DN-CDC25B species. Under this physiological stress condition, the DN-CDC25B isoform was found to play a crucial, nonredundant function in restarting the cell cycle after DNA damage-induced G2 phase arrest. Our findings reveal the existence of a previously unrecognized CDC25B isoform that operates specifically in the nucleus to reinitiate G2/M transition after DNA damage. Cancer Res; 71(5); 1968-77. Ó2011 AACR.