Although Betaig-h3 gene has been suggested to modulate cell adhesion and tumor formation, its physiological functions are not well understood. Using human papillomavirus immortalized human bronchial epithelial (BEP2D) cells, we found that Betaig-h3 expression was markedly decreased in asbestos-induced tumorigenic cells. Fusion of tumorigenic and control BEP2D cells resulted in the recovery of Betaig-h3 gene expression to control level and the loss of tumorigenic phenotype. Furthermore, ectopic expression of Betaig-h3 gene in asbestos-induced tumorigenic cells inhibited cell growth in vitro, anchorage independent phenotype, as well as tumorigenicity in nude mice. Betaig-h3 gene is ubiquitously expressed in various normal human tissues, with the exception of the brain, where there is little or no expression. In contrast, there was a decrease or absence in expression of the Betaig-h3 gene in 14 human tumor cell lines of diverse histological types examined, when compared with normal human cells or tissues. The result strongly suggests that loss of Betaig-h3 expression is a frequent event in human cancer and causally related to acquisition of tumorigenic phenotype in asbestos-treated BEP2D cells.