In serum-free WEHI-3 supernatants an activity was detected inducing haemoglobin synthesis in human and murine erythroleukaemia cell lines. The absolute numbers of benzidine-positive cells induced with either DMSO or WEHI-3-conditioned medium were comparable. Terminal differentiation was not observed. An expression library from WEHI-3 RNA aided by PCR cloning revealed an open reading frame corresponding to a 209 amino acid protein. This was 100% identical to a sequence from human stimulated peripheral blood mononuclear cells. In contrast to human RNA, mouse RNA exhibited multiple bands of pre-mRNA in Northern blots. The gene was provisionally termed erythroid differentiation regulator (edr). In mammalian cells EDR is mostly expressed as a 56 kDa dimer showing higher activity than the recombinant monomer. The activity profile is bell-shaped. Expression was observed in many normal mouse tissues, yet in haematopoiesis it was largely confined to CD34+ cells. It was enhanced by a series of stimuli such as phorbol ester, and transformed cells generally showed a higher level of EDR expression than normal ones. The protein is localized at the inner side of the cytoplasmic membrane and is released in part via vesicles. In view of the broad range of EDR-expressing tissues the function obviously exceeds haemoglobin synthesis induction. Involvement in cell survival and growth control has been observed and will be dealt with in detail elsewhere.