We have isolated by subtractive hybridization a novel gene, called H-rev107, which is specifically expressed in a phenotypic revertant of H-ras transformed 208F rat fibroblasts. Apart from oncogene revertants, strong expression of H-rev107 was found in REF52 and EK-3 cells, two fibroblast lines resistant to transformation by activated H-ras oncogenes. In contrast, transformation-sensitive fibroblasts like 208F or NIH3T3 cells expressed only very little H-rev107 RNA. In H-ras or v-src transformed fibroblasts, H-rev107 RNA was undetectable. Introduction of the adenovirus E1A nuclear oncogene into ras-resistant REF52 cells abolished their transformation resistance and repressed the H-rev107 gene. H-rev107 encodes a protein with a molecular weight of 18 kDa without any structural similarity to known proteins. p18H-rev107 exists in two forms which can be distinguished by their electrophoretic mobility; one is localized predominantly in cell membranes, the other in the cytoplasm. In confluent contact-inhibited 208F cells, p18H-rev107 accumulated in cell membranes, while growth arrest induced by serum starvation did not induce H-rev107. In REF52, cell density had no influence on the expression or localization of p18H-rev107. Repression of the H-rev107 gene may be closely associated with the loss of density-dependent growth inhibition and with the expression of the neoplastic phenotype.