We have identified a novel homeobox gene, designated K-2, using a reverse transcription PCR cloning strategy. Sequence analysis reveals that the homeobox of K-2 is 77.6% homologous at the nucleotide level and 97% identical at the amino acid sequence level to another murine gene, S8. Homeodomain sequence comparisons indicate that K-2 and S8 represent a distinct subclass of paired type homeobox genes. Northern blot analysis of RNA from murine embryos and adult tissues identified multiple transcripts that are expressed in a developmentally specific and tissue restricted manner. Alternate splicing of K-2 at the 3-coding region leads to the inclusion of a chain terminating sequence. In addition, the developmental expression pattern of this gene at day 12 of gestation was determined by in situ hybridization. Expression was observed in diverse mesenchymal cells in craniofacial, pericardial, primitive dermal, prevertebral, and genital structures.