A novel cDNA was partially isolated from a HepG2 cell expression library by screening with the promoterlinked coupling element (PCE), a site from the ␣-fetoprotein (AFP) gene promoter. The remainder of the cDNA was cloned from fetal liver RNA using random amplification of cDNA ends. The cDNA encodes a 239-amino acid peptide with domains closely related to the Drosophila factor nk-2. The new factor is the eighth vertebrate factor related to nk-2, hence nkx-2.8. Northern blot and reverse transcriptase polymerase chain reaction analysis demonstrated mRNA in HepG2, two other AFPexpressing human cell lines, and human fetal liver. Transcripts were not detected in adult liver. Cell-free translation produced DNA binding activity that gel shifted a PCE oligonucleotide. Cotransfection of nkx-2.8 expression and PCE reporter plasmids into HeLa cells demonstrated transcriptional activation; NH 2 -terminal deletion eliminated this activity. Cotransfection into AFP-producing hepatocytic cells repressed AFP reporter expression, suggesting that endogenous activity was already present in these cells. In contrast, cotransfection into an AFP-negative hepatocytic line produced moderate activation of the AFP gene. The cardiac developmental factor nkx-2.5 could substitute for nkx-2.8 in all transfection assays, whereas another related factor, thyroid transcription factor 1, showed a more limited range of substitution. Although the studies have yet to establish definitively that nkx-2.8 is the AFP gene regulator PCF, the two factors share a common DNA binding site, gel shift behavior, migration on SDS-acrylamide gels, and cellular distribution. Moreover, the nk-2-related genes are developmental regulators, and nkx-2.8 is the first such factor associated with liver development.Developmental processes are frequently associated with expression of specific homeobox transcription factors. Although all share a common form of DNA binding domain, the hundreds of known homeobox factors belong to many subfamilies with a wide variety of secondary domains (1). The Drosophila factor nk-2 is the prototype of a distinct family of homeobox factors. nk-2-related homeodomain factors have been characterized in Drosophila (nk-2, nk-3/bagpipe, and nk-4/tinman/msh2), planarians (Dth1 and Dth2), leeches (lox10), Caenorhabditis (Ceh22), and vertebrates (nkx-2.1 to 2.7) (2). The nk-2-related factors contain a characteristic secondary domain, the "conserved peptide," which has an unknown function and is unrelated to known protein domains.The three Drosophila homologues have important developmental functions. nk-2 is involved in early neurogenesis, nk-3 is required for visceral muscle formation, and nk-4 is essential for the formation of precardiac mesoderm.The vertebrate nk-2 factors also regulate development. nkx-2