The mouse Lyl-1 gene was cloned and shown to consist of four exons with extensive nucleotide and structural homology to the human LYL1 gene. The Lyl-1 gene was localized to the central region of mouse chromosome 8 which defines a new region of synteny with human chromosome 19p. The predicted mouse Lyl-1 protein is 78% identical to human LYL1. The region of highest similarity occurs in the basic DNA binding and helix-loop-helix dimerization motifs which are nearly identical in mouse and man differing by only one conservative amino acid substitution. Expression of the Lyl-1 gene was found to be low in murine spleen and undetectable in other tissues by Northern blot analysis. In lymphoid cell lines, Lyl-1 was expressed in most B lineage cells but downregulated during terminal differentiation and was not expressed in most T lineage cells. In a human T ALL cell line carrying a translocation that juxtaposed LYL1 with the beta TCR gene, the translocated LYL1 gene was transcriptionally active whereas the nontranslocated gene was transcriptionally silent. We conclude that LYL1 has the properties of a lineage- and differentiation-specific HLH protein that contributes to T-cell neoplasia through its deregulated expression following chromosomal translocation.