We identified an alternative mRNA encoding a novel cadherin-7 isoform by reverse transcriptase-PCR of RNA from day 12 chicken embryos. The alternative mRNA contains 49 bases of insertion in the premembrane region, leading to the substitution of 14 amino acids and the introduction of a premature stop codon. Identification of a 49-bp insertion sequence in the genomic DNA corresponding to the intron of the cadherin-7 gene suggests that alternative splicing is the cause of the alternative mRNA. Transient expression of the variant form in COS-7 or 293 cells produced a soluble protein. Aggregation assays and immunoprecipitation showed that the variant protein interacts with full-length cadherin-7 in vitro and in vivo and inhibits full-length cadherin-7-mediated cell adhesion. Immunohistochemistry revealed that the variant form was strongly expressed in dermomyotomes rather than in migrating neural crest cells, in contrast to the full-length cadherin-7, suggesting differential regulation of splicing and possible roles of variant cadherin-7 in the development of dermomyotomes and other tissues.