By a combination of cDNA library screening, rapid amplification of cDNA ends analysis, and BAC sequencing, a novel human patched-like gene (PTCH2) has been cloned and sequenced. The genomic organization is similar to PTCH1 with 22 exons and, by radiation hybrid mapping, PTCH2 has been localized to chromosome 1p33-34, a region often lost in a variety of tumors. Several alternatively spliced mRNA forms of PTCH2 were identified, including transcripts lacking segments thought to be involved in sonic hedgehog binding and mRNAs with differentially defined 3' terminal exons. In situ hybridization revealed high expression of PTCH2 transcripts in both familial and sporadic basal cell carcinomas in similarity to what has been observed for PTCH1, suggesting a negative regulation of PTCH2 by PTCH1. This finding tightly links PTCH2 with the sonic hedgehog/PTCH signaling pathway, implying that PTCH2 has related, but yet distinct, functions than PTCH1.