To identify genes with prognostic potential in acute myeloid leukemia (AML), we applied microarray analysis and real-time PCR to RNA from cryopreserved bone marrow or venous blood samples from 61 patients with newly diagnosed or relapsed AML, and the expression of one gene, TG-interacting factor (TGIF) was found to be highly predictive of relapse and survival. TGIF is a transcriptional repressor belonging to the TALE (three amino acid loop extension) class of homeobox proteins, and deletion or mutation of a single allele of TGIF is associated with the craniofacial genetic disorder holoprosencephaly (HPE). TGIF transcripts in blasts from patients with AML have now been analyzed for mutations using reverse transcriptase-based PCR followed by dideoxy fingerprinting and automated sequencing. Using this approach, we identified the identical, aberrantly spliced TGIF transcript in independent RNA samples from a subset of patients (10/48) with low TGIF expression and poor long-term survival. Sequencing of this novel product showed that it lacked part of exon 1, all of exon 2, and most of exon 3 and eliminated all of the known interacting domains of TGIF (DNA binding, SMAD2, and mSin3A interacting). In contrast, Southern blot analysis of DNA from these patients did not identify any gross abnormalities in TGIF gene structure. This in combination with the RNA results suggests the likelihood of aberrant splicing. In sum, these results identify a novel, recurrent genetic abnormality in AML. The presence of aberrant splicing in AML contrasts with HPE, which is associated with mono-allelic mutations or deletions. As the protein product of this transcript would not be expected to have any of the known functions of TGIF in the cell, reduced expression of functional protein product may have a role in relapse or progression of AML.