In an attempt to isolate novel regulatory and/or tumor suppressor genes, we identified cDNAs whose abundance is low in NIH 3T3 cells and further decreased following the expression of the activated oncogene, v-src. The transcription of one such gene, 322, is suppressed at least 15-fold in src-, ras-, and fos-transformed cells and 3-fold in myc-transformed cells but is unaffected in raf-, mos-, or neu-transformed cells. Activation of a ts-v-src allele in confluent 3Y1 fibroblasts resulted in an initial increase in 322 mRNA levels after 1 to 2 h followed by a rapid decrease to suppressed levels after 4 to 8 h. Morphological transformation was not detected until 12 h later, indicating that the accumulation of 322 transcripts is regulated by v-src and not as a consequence of transformation. Addition of fetal calf serum to starved subconfluent NIH 3T3 or 3Y1 fibroblasts resulted in a similar biphasic regulation of 322, indicating that 322 transcription is responsive to mitogenic factors. Sequence analysis of a putative full-length 322 cDNA clone (5.4 kb) identified a large open reading frame (ORF) encoding a 148.1-kDa product. In vitro transcription and translation of the 322 cDNA from a T7 promoter resulted in a 207-kDa product whose electrophoretic mobility on a sodium dodecyl sulfate-polyacrylamide gel electrophoresis gel was unaffected by digestion with endoglycosidase F. The discrepancy in predicted versus measured molecular weights may result from the high percentage of acidic residues (roughly 20% Glu or Asp) in the 322 ORF product. Comparison of the 322 cDNA ORF with sequences in data banks indicates that this gene is novel. The 322 ORF product contains a potential Cys-1-His-3 Zn finger, at least five nuclear localization signals of the adenovirus E1a motif K(R/K)X(R/K), and alternating acidic and basic domains. Overexpression of the 322 cells resulted in the selection of rapidly growing cells which had lost the transduced 322 cDNA. Thus, 322 represent a novel src- and ras-regulated gene which encodes a potential regulator of mitogenesis and/or tumor suppressor.