To analyze myelomonocytic differentiation we have used the approach of differential cDNA analysis to isolate novel genes that are preferentially expressed in mature macrophages. Differential screening of a macrophage cDNA library led to the identification of a novel cDNA that showed macrophage lineage- and differentiation stage-specific expression. Transcripts from the gene, which we have termed Mpg-1, are found at a high level in mature human and murine macrophages and at a moderate level in certain myelomonocytic cell lines. The expression of Mpg-1 was found to increase when murine fetal liver hematopoietic progenitor cells were induced to differentiate into macrophages. An Mpg- 1-specific transcript was not detected in a wide variety of other tissues and cell lines. The DNA sequence of Mpg-1 (4,214 bp) was obtained from a series of overlapping cDNA, 33′ rapid amplification of cDNA ends (RACE), and genomic clones. Primer extension analysis predicted the existence of multiple transcription start sites, ranging from 26 to 117 bp upstream of the 53′ proximal ATG of the open reading frame. The predicted 669-amino acid, Mpg-1-encoded protein has potential glycosylation and phosphorylation sites in addition to a signal sequence. The core protein is predicted to have a molecular weight of 71 to 74 kD. Computer-assisted local similarity searches indicate that Mpg-1 is a novel gene that may share a distant ancestry to perforin, a lytic protein found in cytotoxic T lymphocytes and natural killer cells.