AP-2 proteins comprise a family of highly related transcription factors, which are expressed during mouse embryogenesis in a variety of ectodermal, neuroectodermal, and mesenchymal tissues. AP-2 transcription factors were shown to be involved in morphogenesis of craniofacial, urogenital, neural crest-derived, and placental tissues. By means of a partial cDNA fragment identified during an expressed sequence tag search for AP-2 genes, we identified a fifth, previously unknown AP-2-related gene, AP-2 epsilon. AP-2 epsilon encodes an open reading frame of 434 amino acids, which reveals the typical modular structure of AP-2 transcription factors with highly conserved C-terminal DNA binding and dimerization domains. Although the N-terminally localized activation domain is less homologous, position and identity of amino acids essential for transcriptional transactivation are conserved. Reverse transcriptase-polymerase chain reaction analyses of murine embryos revealed AP-2 epsilon expression from gestational stage embryonic day 7.5 throughout all later embryonic stages until birth. Whole-mount in situ hybridization using a specific AP-2 epsilon cDNA fragment demonstrated that during embryogenesis, expression of AP-2 epsilon is mainly restricted to neural tissue, especially the midbrain, hindbrain, and olfactory bulb. This expression pattern was confirmed by immunohistochemistry with an AP-2 epsilon-specific antiserum. By using this antiserum, we could further localize AP-2 epsilon expression in a hypothalamic nucleus and the neuroepithelium of the vomeronasal organ, suggesting an important function of AP-2 epsilon for the development of the olfactory system.