We have identified a CpG island contained within the largest factor VIII intron. This island is associated with a 1.8-kb transcript and, unlike factor VIII, is produced abundantly in a wide variety of cell types. The nested gene is oriented in a direction opposite to that of factor VIII and contains no intervening sequences. A cDNA of 1739 bases was isolated from a human liver library and found to have a GC-rich, long open reading frame. Two computer-assisted methods (Fickett TESTCODE and Staden-McLachlan codon usage) predict that the gene codes for a protein. Two other copies of this gene are located within 1.1 Mb of the factor VIII gene. Northern blot analysis of RNA isolated from hemophilia patients deleted for factor VIII sequences has shown that both the intron gene and at least one other copy of the gene are transcribed. A homologous, transcribed sequence is also present in mice.