We have isolated the Ly-3 gene by chromosomal walking from the previously cloned Ly-2 gene. These genes are shown to be 36 kb apart and in the same transcriptional orientation. Transfection of the Ly-3 gene into mouse L cells results in cell surface expression of Ly-3 protein only in the presence of Ly-2 (or its human homolog, CD8), although Ly-2 surface expression is not similarly dependent on Ly-3. cDNA clones encoding Ly-3 have been isolated and sequenced and show little sequence similarity to Ly-2, whereas both Ly-2 and Ly-3 are homologous to Ig variable regions. One cDNA clone encodes a form of Ly-3 lacking a transmembrane region. Although two alleles of Ly-3 have been previously defined serologically, Northern blot analyses of Ly-3 mRNA from a series of inbred mouse strains show unusual polymorphisms in the lengths of Ly-3 mRNA species defining at least three allelic variants of this gene.