We have identified a novel form of recessive ataxia that segregates in three children of a large consanguineous Saudi Arabian family. The three patients presented with childhood onset gait and limb ataxia, dysarthria and had limited walking without aid into their teenage years. Two patients developed epilepsy at 7 months without relapse after treatment, and mental retardation. Linkage studies allowed us to identify a single locus that segregated with the disease on chromosome 3q28-qter. Mutation screening of all coding sequences revealed a single nucleotide deletion, 2927delC, in exon 19 of the KIAA0226 gene, which results in a frame shift of the C-terminal domain (p.Ala943ValfsX146). The KIAA0226 gene encodes a protein that we named rundataxin, with two conserved domains: an N-terminal RUN domain and a C-terminal domain containing a diacylglycerol binding-like motif. The closest paralogue of rundataxin, the plekstrin homology domain family member M1, has been shown to colocalize with Rab7, a small GTPase associated with late endosomes/lysosomes, suggesting that rundataxin may also be associated with vesicular trafficking and signalling pathways through its RUN and diacylglycerol binding-like domains. The rundataxin pathway appears therefore distinct from the ataxia pathways involving deficiency in mitochondrial or nuclear proteins and broadens the range of mechanisms leading to recessive ataxias.