A cDNA encoding a novel zinc finger protein has been isolated from a mouse T-cell leukemia line on the basis of its expression of a Ly-1 epitope in a kgtl 1 library. The putative gene was mapped on mouse chromosome 1, closely linked to Idh-1, but not linked to the Ly-1 (CD5) gene. The cDNA is therefore named Ly-1 antibody reactive clone (LYAR). The putative polypeptide encoded by the cDNA consists of 388 amino acids with a zinc finger motif and three copies of nuclear localization signals. Antibodies raised against a LYAR fusion protein reacted with a protein of 45 kD on Western blots and by immunoprecipitation. Immunolocalization indicated that LYAR was present predominantly in the nucleoli. The LYAR mRNA was not detected in brain, thymus, bone marrow, liver, heart, and muscle. Low levels of LYAR mRNA were detected in kidney and spleen. However, the LYAR gene was expressed at very high levels in immature spermatocytes in testis. The LYAR mRNA is present at high levels in early embryos and preferentially in fetal liver and fetal thymus. A number of B-and T-cell leukemic lines expressed LYAR at high levels, although it was not detectable in bone marrow and thymus. During radiation-induced T-ceU leukemogenesis, high levels of LYAR were expressed in preleukemic thymocytes and in acute T leukemia cells. Fibroblast cells overexpressing the LYAR cDNA from a retrovirus vector, though not phenotypically transformed in vitro, had increased ability to form tumors in nu/nu mice. Therefore, LYAR may function as a novel nucleolar oncoprotein to regulate cell growth.